Correlation Between Origin Materials and Berkshire Grey

Can any of the company-specific risk be diversified away by investing in both Origin Materials and Berkshire Grey 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 Berkshire Grey 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 Berkshire Grey, you can compare the effects of market volatilities on Origin Materials and Berkshire Grey 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 Berkshire Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Materials and Berkshire Grey.

Diversification Opportunities for Origin Materials and Berkshire Grey

0.15

Correlation Coefficient

Origin Materials  Berkshire Grey

Average diversification

The 3 months correlation between Origin and Berkshire is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials Warrant and Berkshire Grey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Grey 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 Berkshire Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Grey has no effect on the direction of Origin Materials i.e., Origin Materials and Berkshire Grey go up and down completely randomly.

Pair Corralation between Origin Materials and Berkshire Grey

If you would invest  9.50  in Origin Materials Warrant on September 3, 2024 and sell it today you would earn a total of  2.50  from holding Origin Materials Warrant or generate 26.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Origin Materials Warrant  vs.  Berkshire Grey

Origin Materials Warrant

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Materials Warrant are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Origin Materials showed solid returns over the last few months and may actually be approaching a breakup point.

Berkshire Grey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berkshire Grey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Berkshire Grey is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Origin Materials and Berkshire Grey

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

The idea behind Origin Materials Warrant and Berkshire Grey 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.