Correlation Between BacTech Environmental and OriginClear
Can any of the company-specific risk be diversified away by investing in both BacTech Environmental and OriginClear 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 BacTech Environmental and OriginClear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BacTech Environmental and OriginClear, you can compare the effects of market volatilities on BacTech Environmental and OriginClear 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 BacTech Environmental with a short position of OriginClear. Check out your portfolio center. Please also check ongoing floating volatility patterns of BacTech Environmental and OriginClear.
Diversification Opportunities for BacTech Environmental and OriginClear
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BacTech and OriginClear is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BacTech Environmental and OriginClear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OriginClear and BacTech Environmental 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 BacTech Environmental are associated (or correlated) with OriginClear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OriginClear has no effect on the direction of BacTech Environmental i.e., BacTech Environmental and OriginClear go up and down completely randomly.
Pair Corralation between BacTech Environmental and OriginClear
Assuming the 90 days horizon BacTech Environmental is expected to under-perform the OriginClear. But the otc stock apears to be less risky and, when comparing its historical volatility, BacTech Environmental is 1.11 times less risky than OriginClear. The otc stock trades about -0.05 of its potential returns per unit of risk. The OriginClear is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.86 in OriginClear on August 29, 2024 and sell it today you would lose (0.36) from holding OriginClear or give up 41.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.05% |
| Values | Daily Returns |
BacTech Environmental vs. OriginClear
Performance |
| Timeline |
| BacTech Environmental |
| OriginClear |
BacTech Environmental and OriginClear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BacTech Environmental and OriginClear
The main advantage of trading using opposite BacTech Environmental and OriginClear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BacTech Environmental position performs unexpectedly, OriginClear 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 OriginClear will offset losses from the drop in OriginClear's long position.| BacTech Environmental vs. BluMetric Environmental | BacTech Environmental vs. Agilyx AS | BacTech Environmental vs. EcoPlus | BacTech Environmental vs. BQE Water |
| OriginClear vs. BacTech Environmental | OriginClear vs. Agilyx AS | OriginClear vs. Avalon Holdings | OriginClear vs. Ambipar Emergency Response |
Check out your portfolio center.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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