Correlation Between OriginClear and BacTech Environmental
Can any of the company-specific risk be diversified away by investing in both OriginClear and BacTech Environmental 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 OriginClear and BacTech Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OriginClear and BacTech Environmental, you can compare the effects of market volatilities on OriginClear and BacTech Environmental 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 OriginClear with a short position of BacTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of OriginClear and BacTech Environmental.
Diversification Opportunities for OriginClear and BacTech Environmental
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OriginClear and BacTech is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding OriginClear and BacTech Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BacTech Environmental and OriginClear 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 OriginClear are associated (or correlated) with BacTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BacTech Environmental has no effect on the direction of OriginClear i.e., OriginClear and BacTech Environmental go up and down completely randomly.
Pair Corralation between OriginClear and BacTech Environmental
Given the investment horizon of 90 days OriginClear is expected to generate 1.4 times more return on investment than BacTech Environmental. However, OriginClear is 1.4 times more volatile than BacTech Environmental. It trades about 0.04 of its potential returns per unit of risk. BacTech Environmental is currently generating about -0.12 per unit of risk. If you would invest 0.57 in OriginClear on August 25, 2024 and sell it today you would lose (0.02) from holding OriginClear or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OriginClear vs. BacTech Environmental
Performance |
| Timeline |
| OriginClear |
| BacTech Environmental |
OriginClear and BacTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OriginClear and BacTech Environmental
The main advantage of trading using opposite OriginClear and BacTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OriginClear position performs unexpectedly, BacTech Environmental 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 BacTech Environmental will offset losses from the drop in BacTech Environmental's long position.| OriginClear vs. BacTech Environmental | OriginClear vs. Agilyx AS | OriginClear vs. Avalon Holdings | OriginClear vs. Ambipar Emergency Response |
| BacTech Environmental vs. BluMetric Environmental | BacTech Environmental vs. Agilyx AS | BacTech Environmental vs. EcoPlus | BacTech Environmental vs. BQE Water |
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 CEOs Directory module to screen CEOs from public companies around the world.
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