Correlation Between Origin Materials and Stepstone
Can any of the company-specific risk be diversified away by investing in both Origin Materials and Stepstone 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 Materials and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Materials and Stepstone Group, you can compare the effects of market volatilities on Origin Materials and Stepstone 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 Materials with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Materials and Stepstone.
Diversification Opportunities for Origin Materials and Stepstone
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Origin and Stepstone is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and Origin Materials 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 Materials are associated (or correlated) with Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Origin Materials i.e., Origin Materials and Stepstone go up and down completely randomly.
Pair Corralation between Origin Materials and Stepstone
Given the investment horizon of 90 days Origin Materials is expected to generate 3.45 times more return on investment than Stepstone. However, Origin Materials is 3.45 times more volatile than Stepstone Group. It trades about 0.0 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.09 per unit of risk. If you would invest 123.00 in Origin Materials on September 14, 2024 and sell it today you would lose (3.00) from holding Origin Materials or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Materials vs. Stepstone Group
Performance |
| Timeline |
| Origin Materials |
| Stepstone Group |
Origin Materials and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Materials and Stepstone
The main advantage of trading using opposite Origin Materials and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Materials position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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