Correlation Between Main Street and OriginClear
Can any of the company-specific risk be diversified away by investing in both Main Street 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 Main Street and OriginClear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and OriginClear, you can compare the effects of market volatilities on Main Street 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 Main Street with a short position of OriginClear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and OriginClear.
Diversification Opportunities for Main Street and OriginClear
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Main and OriginClear is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and OriginClear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OriginClear and Main Street 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 Main Street Capital 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 Main Street i.e., Main Street and OriginClear go up and down completely randomly.
Pair Corralation between Main Street and OriginClear
Given the investment horizon of 90 days Main Street is expected to generate 2.35 times less return on investment than OriginClear. But when comparing it to its historical volatility, Main Street Capital is 10.99 times less risky than OriginClear. It trades about 0.15 of its potential returns per unit of risk. OriginClear is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.65 in OriginClear on November 27, 2024 and sell it today you would lose (0.32) from holding OriginClear or give up 49.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.37% |
| Values | Daily Returns |
Main Street Capital vs. OriginClear
Performance |
| Timeline |
| Main Street Capital |
| OriginClear |
Main Street and OriginClear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and OriginClear
The main advantage of trading using opposite Main Street and OriginClear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street 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.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| OriginClear vs. Agilyx AS | OriginClear vs. EcoPlus | OriginClear vs. BQE Water | OriginClear vs. LiCycle Holdings Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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