Correlation Between Origin Property and ONE Enterprise

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

By analyzing existing cross correlation between Origin Property PCL and The ONE Enterprise, you can compare the effects of market volatilities on Origin Property and ONE Enterprise 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 Property with a short position of ONE Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Property and ONE Enterprise.

Diversification Opportunities for Origin Property and ONE Enterprise

-0.43

Correlation Coefficient

Origin Property  ONE Enterprise

Very good diversification

The 3 months correlation between Origin and ONE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Origin Property PCL and The ONE Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONE Enterprise and Origin Property 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 Property PCL are associated (or correlated) with ONE Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONE Enterprise has no effect on the direction of Origin Property i.e., Origin Property and ONE Enterprise go up and down completely randomly.

Pair Corralation between Origin Property and ONE Enterprise

Assuming the 90 days trading horizon Origin Property PCL is expected to under-perform the ONE Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, Origin Property PCL is 1.33 times less risky than ONE Enterprise. The stock trades about -0.28 of its potential returns per unit of risk. The The ONE Enterprise is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  416.00  in The ONE Enterprise on October 8, 2024 and sell it today you would earn a total of  24.00  from holding The ONE Enterprise or generate 5.77% return on investment over 90 days.

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

Origin Property PCL  vs.  The ONE Enterprise

Origin Property PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Property PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ONE Enterprise

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The ONE Enterprise are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, ONE Enterprise may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Origin Property and ONE Enterprise

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

The idea behind Origin Property PCL and The ONE Enterprise 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.