Correlation Between Equinor ASA and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Equinor ASA and Origin Energy 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 Equinor ASA and Origin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinor ASA ADR and Origin Energy Ltd, you can compare the effects of market volatilities on Equinor ASA and Origin Energy 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 Equinor ASA with a short position of Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinor ASA and Origin Energy.
Diversification Opportunities for Equinor ASA and Origin Energy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equinor and Origin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Equinor ASA ADR and Origin Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy and Equinor ASA 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 Equinor ASA ADR are associated (or correlated) with Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Equinor ASA i.e., Equinor ASA and Origin Energy go up and down completely randomly.
Pair Corralation between Equinor ASA and Origin Energy
Given the investment horizon of 90 days Equinor ASA ADR is expected to generate 14.37 times more return on investment than Origin Energy. However, Equinor ASA is 14.37 times more volatile than Origin Energy Ltd. It trades about 0.11 of its potential returns per unit of risk. Origin Energy Ltd is currently generating about 0.21 per unit of risk. If you would invest 2,363 in Equinor ASA ADR on August 24, 2024 and sell it today you would earn a total of 126.00 from holding Equinor ASA ADR or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinor ASA ADR vs. Origin Energy Ltd
Performance |
| Timeline |
| Equinor ASA ADR |
| Origin Energy |
Equinor ASA and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinor ASA and Origin Energy
The main advantage of trading using opposite Equinor ASA and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinor ASA position performs unexpectedly, Origin Energy 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 Energy will offset losses from the drop in Origin Energy's long position.| Equinor ASA vs. Shell PLC ADR | Equinor ASA vs. BP PLC ADR | Equinor ASA vs. Eni SpA ADR | Equinor ASA vs. Galp Energa |
| Origin Energy vs. BP plc | Origin Energy vs. China Petroleum Chemical | Origin Energy vs. TotalEnergies SE | Origin Energy vs. Shell PLC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |