Correlation Between Orange SA and KORE Group

Can any of the company-specific risk be diversified away by investing in both Orange SA and KORE Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Orange SA and KORE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orange SA ADR and KORE Group Holdings, you can compare the effects of market volatilities on Orange SA and KORE Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Orange SA with a short position of KORE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and KORE Group.

Diversification Opportunities for Orange SA and KORE Group

0.43

Correlation Coefficient

Orange SA  KORE Group

Very weak diversification

The 3 months correlation between Orange and KORE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and KORE Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORE Group Holdings and Orange SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Orange SA ADR are associated (or correlated) with KORE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORE Group Holdings has no effect on the direction of Orange SA i.e., Orange SA and KORE Group go up and down completely randomly.

Pair Corralation between Orange SA and KORE Group

Given the investment horizon of 90 days Orange SA ADR is expected to generate 0.33 times more return on investment than KORE Group. However, Orange SA ADR is 3.06 times less risky than KORE Group. It trades about -0.16 of its potential returns per unit of risk. KORE Group Holdings is currently generating about -0.08 per unit of risk. If you would invest  1,171  in Orange SA ADR on January 31, 2024 and sell it today you would lose (50.00) from holding Orange SA ADR or give up 4.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Orange SA ADR  vs.  KORE Group Holdings

Orange SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orange SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Orange SA is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

KORE Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KORE Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KORE Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Orange SA and KORE Group

The main advantage of trading using opposite Orange SA and KORE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, KORE Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KORE Group will offset losses from the drop in KORE Group's long position.

The idea behind Orange SA ADR and KORE Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.