Correlation Between Malin Plc and Origin Enterprises

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

By analyzing existing cross correlation between Malin plc and Origin Enterprises Plc, you can compare the effects of market volatilities on Malin Plc and Origin Enterprises 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 Malin Plc with a short position of Origin Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malin Plc and Origin Enterprises.

Diversification Opportunities for Malin Plc and Origin Enterprises

-0.66

Correlation Coefficient

Malin Plc  Origin Enterprises

Excellent diversification

The 3 months correlation between Malin and Origin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Malin plc and Origin Enterprises Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Enterprises Plc and Malin Plc 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 Malin plc are associated (or correlated) with Origin Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Enterprises Plc has no effect on the direction of Malin Plc i.e., Malin Plc and Origin Enterprises go up and down completely randomly.

Pair Corralation between Malin Plc and Origin Enterprises

Assuming the 90 days trading horizon Malin plc is expected to generate 3.47 times more return on investment than Origin Enterprises. However, Malin Plc is 3.47 times more volatile than Origin Enterprises Plc. It trades about 0.23 of its potential returns per unit of risk. Origin Enterprises Plc is currently generating about -0.05 per unit of risk. If you would invest  605.00  in Malin plc on September 22, 2024 and sell it today you would earn a total of  265.00  from holding Malin plc or generate 43.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Malin plc  vs.  Origin Enterprises Plc

Malin plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Malin plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Malin Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Origin Enterprises Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Enterprises Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Malin Plc and Origin Enterprises

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

The idea behind Malin plc and Origin Enterprises Plc 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.