Correlation Between Origin Materials and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Origin Materials and Saratoga Investment 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 Saratoga Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Materials and Saratoga Investment Corp, you can compare the effects of market volatilities on Origin Materials and Saratoga Investment 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 Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Materials and Saratoga Investment.
Diversification Opportunities for Origin Materials and Saratoga Investment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Origin and Saratoga is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Origin Materials i.e., Origin Materials and Saratoga Investment go up and down completely randomly.
Pair Corralation between Origin Materials and Saratoga Investment
Given the investment horizon of 90 days Origin Materials is expected to generate 6.04 times more return on investment than Saratoga Investment. However, Origin Materials is 6.04 times more volatile than Saratoga Investment Corp. It trades about 0.01 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.05 per unit of risk. If you would invest 154.00 in Origin Materials on December 2, 2024 and sell it today you would lose (63.00) from holding Origin Materials or give up 40.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Origin Materials vs. Saratoga Investment Corp
Performance |
Timeline |
Origin Materials |
Saratoga Investment Corp |
Origin Materials and Saratoga Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Materials and Saratoga Investment
The main advantage of trading using opposite Origin Materials and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Materials position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment's long position.Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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