Correlation Between Origin Energy and GDI Property
Can any of the company-specific risk be diversified away by investing in both Origin Energy and GDI Property 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 GDI Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy and GDI Property Group, you can compare the effects of market volatilities on Origin Energy and GDI Property 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 GDI Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and GDI Property.
Diversification Opportunities for Origin Energy and GDI Property
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Origin and GDI is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy and GDI Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Property Group 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 GDI Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Property Group has no effect on the direction of Origin Energy i.e., Origin Energy and GDI Property go up and down completely randomly.
Pair Corralation between Origin Energy and GDI Property
Assuming the 90 days trading horizon Origin Energy is expected to generate 0.67 times more return on investment than GDI Property. However, Origin Energy is 1.5 times less risky than GDI Property. It trades about 0.08 of its potential returns per unit of risk. GDI Property Group is currently generating about 0.01 per unit of risk. If you would invest 773.00 in Origin Energy on August 31, 2024 and sell it today you would earn a total of 317.00 from holding Origin Energy or generate 41.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Origin Energy vs. GDI Property Group
Performance |
| Timeline |
| Origin Energy |
| GDI Property Group |
Origin Energy and GDI Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and GDI Property
The main advantage of trading using opposite Origin Energy and GDI Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy position performs unexpectedly, GDI Property 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 GDI Property will offset losses from the drop in GDI Property's long position.| Origin Energy vs. Strickland Metals | Origin Energy vs. Leeuwin Metals | Origin Energy vs. Patriot Battery Metals | Origin Energy vs. Group 6 Metals |
| GDI Property vs. Scentre Group | GDI Property vs. Charter Hall Retail | GDI Property vs. Ecofibre | GDI Property 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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