Correlation Between Origin Materials and Yotta Acquisition

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

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

Diversification Opportunities for Origin Materials and Yotta Acquisition

-0.9

Correlation Coefficient

Origin Materials  Yotta Acquisition

Pay attention - limited upside

The 3 months correlation between Origin and Yotta is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials and Yotta Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition 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 Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition has no effect on the direction of Origin Materials i.e., Origin Materials and Yotta Acquisition go up and down completely randomly.

Pair Corralation between Origin Materials and Yotta Acquisition

Given the investment horizon of 90 days Origin Materials is expected to under-perform the Yotta Acquisition. In addition to that, Origin Materials is 13.95 times more volatile than Yotta Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Yotta Acquisition is currently generating about 0.05 per unit of volatility. If you would invest  1,002  in Yotta Acquisition on September 18, 2024 and sell it today you would earn a total of  125.00  from holding Yotta Acquisition or generate 12.48% return on investment over 90 days.

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

Origin Materials  vs.  Yotta Acquisition

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 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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Yotta Acquisition

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yotta Acquisition are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yotta Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Origin Materials and Yotta Acquisition

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

The idea behind Origin Materials and Yotta Acquisition 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.