Correlation Between Omni Health and Origin Materials

Can any of the company-specific risk be diversified away by investing in both Omni Health and Origin Materials 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 Omni Health and Origin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Omni Health and Origin Materials, you can compare the effects of market volatilities on Omni Health and Origin Materials 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 Omni Health with a short position of Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Health and Origin Materials.

Diversification Opportunities for Omni Health and Origin Materials

0.0

Correlation Coefficient

Omni Health  Origin Materials

Pay attention - limited upside

The 3 months correlation between Omni and Origin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Omni Health and Origin Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials and Omni Health 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 Omni Health are associated (or correlated) with Origin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Materials has no effect on the direction of Omni Health i.e., Omni Health and Origin Materials go up and down completely randomly.

Pair Corralation between Omni Health and Origin Materials

If you would invest  121.00  in Origin Materials on October 6, 2024 and sell it today you would earn a total of  4.00  from holding Origin Materials or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Omni Health  vs.  Origin Materials

Omni Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Origin Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Omni Health and Origin Materials

The main advantage of trading using opposite Omni Health and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Health position performs unexpectedly, Origin Materials 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 Origin Materials will offset losses from the drop in Origin Materials' long position.

The idea behind Omni Health and Origin Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.