Correlation Between Origin Materials and AvePoint

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

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

Diversification Opportunities for Origin Materials and AvePoint

0.33

Correlation Coefficient

Origin Materials  AvePoint

Weak diversification

The 3 months correlation between Origin and AvePoint is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials Warrant and AvePoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AvePoint 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 Warrant are associated (or correlated) with AvePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AvePoint has no effect on the direction of Origin Materials i.e., Origin Materials and AvePoint go up and down completely randomly.

Pair Corralation between Origin Materials and AvePoint

Assuming the 90 days horizon Origin Materials Warrant is expected to under-perform the AvePoint. In addition to that, Origin Materials is 2.06 times more volatile than AvePoint. It trades about -0.04 of its total potential returns per unit of risk. AvePoint is currently generating about -0.02 per unit of volatility. If you would invest  561.00  in AvePoint on December 30, 2024 and sell it today you would lose (111.00) from holding AvePoint or give up 19.79% of portfolio value over 90 days.

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

Origin Materials Warrant  vs.  AvePoint

Origin Materials Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origin Materials Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AvePoint

Risk-Adjusted Performance

Very Weak

Over the last 90 days AvePoint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Origin Materials and AvePoint

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

The idea behind Origin Materials Warrant and AvePoint 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 Global Correlations module to find global opportunities by holding instruments from different markets.