Correlation Between Origin Materials and SuRo Capital

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

By analyzing existing cross correlation between Origin Materials and SuRo Capital Corp, you can compare the effects of market volatilities on Origin Materials and SuRo Capital 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 SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Materials and SuRo Capital.

Diversification Opportunities for Origin Materials and SuRo Capital

0.03

Correlation Coefficient

Origin Materials  SuRo Capital

Significant diversification

The 3 months correlation between Origin and SuRo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Origin Materials i.e., Origin Materials and SuRo Capital go up and down completely randomly.

Pair Corralation between Origin Materials and SuRo Capital

Given the investment horizon of 90 days Origin Materials is expected to under-perform the SuRo Capital. In addition to that, Origin Materials is 1.14 times more volatile than SuRo Capital Corp. It trades about -0.05 of its total potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.13 per unit of volatility. If you would invest  523.00  in SuRo Capital Corp on December 4, 2024 and sell it today you would earn a total of  72.00  from holding SuRo Capital Corp or generate 13.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Origin Materials  vs.  SuRo Capital Corp

Origin Materials

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SuRo Capital Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SuRo Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Origin Materials and SuRo Capital

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

The idea behind Origin Materials and SuRo Capital Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.