Correlation Between Electrovaya Common and Origin Materials

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Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Origin Materials 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 Electrovaya Common and Origin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Origin Materials, you can compare the effects of market volatilities on Electrovaya Common and Origin Materials 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 Electrovaya Common with a short position of Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Origin Materials.

Diversification Opportunities for Electrovaya Common and Origin Materials

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Electrovaya and Origin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Origin Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Origin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Materials has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Origin Materials go up and down completely randomly.

Pair Corralation between Electrovaya Common and Origin Materials

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 0.56 times more return on investment than Origin Materials. However, Electrovaya Common Shares is 1.78 times less risky than Origin Materials. It trades about -0.02 of its potential returns per unit of risk. Origin Materials is currently generating about -0.01 per unit of risk. If you would invest  486.00  in Electrovaya Common Shares on November 2, 2024 and sell it today you would lose (233.00) from holding Electrovaya Common Shares or give up 47.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Electrovaya Common Shares  vs.  Origin Materials

 Performance 
       Timeline  
Electrovaya Common Shares 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.
Origin Materials 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Origin Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Electrovaya Common and Origin Materials Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Electrovaya Common and Origin Materials

The main advantage of trading using opposite Electrovaya Common and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common position performs unexpectedly, Origin Materials 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 Origin Materials will offset losses from the drop in Origin Materials' long position.
The idea behind Electrovaya Common Shares and Origin Materials 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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