Correlation Between Origin Energy and Mystate
Can any of the company-specific risk be diversified away by investing in both Origin Energy and Mystate 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 Mystate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy and Mystate, you can compare the effects of market volatilities on Origin Energy and Mystate 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 Mystate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and Mystate.
Diversification Opportunities for Origin Energy and Mystate
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and Mystate is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy and Mystate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mystate 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 Mystate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mystate has no effect on the direction of Origin Energy i.e., Origin Energy and Mystate go up and down completely randomly.
Pair Corralation between Origin Energy and Mystate
Assuming the 90 days trading horizon Origin Energy is expected to generate 0.73 times more return on investment than Mystate. However, Origin Energy is 1.36 times less risky than Mystate. It trades about 0.54 of its potential returns per unit of risk. Mystate is currently generating about 0.27 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 | 95.65% |
| Values | Daily Returns |
Origin Energy vs. Mystate
Performance |
| Timeline |
| Origin Energy |
| Mystate |
Origin Energy and Mystate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and Mystate
The main advantage of trading using opposite Origin Energy and Mystate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy position performs unexpectedly, Mystate 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 Mystate will offset losses from the drop in Mystate'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 |
| Mystate vs. Alto Metals | Mystate vs. Queste Communications | Mystate vs. Cleanaway Waste Management | Mystate vs. Olivers Real Food |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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