Correlation Between Origin Energy and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both Origin Energy and EMvision Medical 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 EMvision Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy and EMvision Medical Devices, you can compare the effects of market volatilities on Origin Energy and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and EMvision Medical.
Diversification Opportunities for Origin Energy and EMvision Medical
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and EMvision is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Origin Energy i.e., Origin Energy and EMvision Medical go up and down completely randomly.
Pair Corralation between Origin Energy and EMvision Medical
Assuming the 90 days trading horizon Origin Energy is expected to generate 0.3 times more return on investment than EMvision Medical. However, Origin Energy is 3.36 times less risky than EMvision Medical. It trades about 0.54 of its potential returns per unit of risk. EMvision Medical Devices 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 Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Energy vs. EMvision Medical Devices
Performance |
| Timeline |
| Origin Energy |
| EMvision Medical Devices |
Origin Energy and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and EMvision Medical
The main advantage of trading using opposite Origin Energy and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical'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 |
| EMvision Medical vs. Jupiter Energy | EMvision Medical vs. WA1 Resources | EMvision Medical vs. Cooper Metals | EMvision Medical vs. OD6 Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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