Correlation Between Fenbo Holdings and Origin Materials
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings 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 Fenbo Holdings and Origin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenbo Holdings Limited and Origin Materials, you can compare the effects of market volatilities on Fenbo Holdings 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 Fenbo Holdings with a short position of Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and Origin Materials.
Diversification Opportunities for Fenbo Holdings and Origin Materials
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fenbo and Origin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and Origin Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials and Fenbo Holdings 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 Fenbo Holdings Limited 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 Fenbo Holdings i.e., Fenbo Holdings and Origin Materials go up and down completely randomly.
Pair Corralation between Fenbo Holdings and Origin Materials
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the Origin Materials. In addition to that, Fenbo Holdings is 1.9 times more volatile than Origin Materials. It trades about -0.18 of its total potential returns per unit of risk. Origin Materials is currently generating about -0.11 per unit of volatility. If you would invest 143.00 in Origin Materials on August 28, 2024 and sell it today you would lose (19.00) from holding Origin Materials or give up 13.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. Origin Materials
Performance |
| Timeline |
| Fenbo Holdings |
| Origin Materials |
Fenbo Holdings and Origin Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and Origin Materials
The main advantage of trading using opposite Fenbo Holdings and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings 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.| Fenbo Holdings vs. Amer Sports, | Fenbo Holdings vs. Brunswick | Fenbo Holdings vs. Ralph Lauren Corp | Fenbo Holdings vs. Under Armour C |
| Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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