Correlation Between Origin Energy and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Origin Energy and ANZ Group 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 Origin Energy and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy and ANZ Group Holdings, you can compare the effects of market volatilities on Origin Energy and ANZ Group 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 Origin Energy with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and ANZ Group.
Diversification Opportunities for Origin Energy and ANZ Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and ANZ is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Origin Energy 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 Origin Energy are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Origin Energy i.e., Origin Energy and ANZ Group go up and down completely randomly.
Pair Corralation between Origin Energy and ANZ Group
Assuming the 90 days trading horizon Origin Energy is expected to generate 4.54 times more return on investment than ANZ Group. However, Origin Energy is 4.54 times more volatile than ANZ Group Holdings. It trades about 0.54 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.03 per unit of risk. If you would invest 963.00 in Origin Energy on September 1, 2024 and sell it today you would earn a total of 124.00 from holding Origin Energy or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Energy vs. ANZ Group Holdings
Performance |
| Timeline |
| Origin Energy |
| ANZ Group Holdings |
Origin Energy and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and ANZ Group
The main advantage of trading using opposite Origin Energy and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Origin Energy vs. Aurelia Metals | Origin Energy vs. Advanced Braking Technology | Origin Energy vs. Richmond Vanadium Technology | Origin Energy vs. Ainsworth Game Technology |
| ANZ Group vs. Imricor Medical Systems | ANZ Group vs. Midway | ANZ Group vs. Aristocrat Leisure | ANZ Group vs. iShares Global Healthcare |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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