Correlation Between Origin Materials and Security First

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

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

Diversification Opportunities for Origin Materials and Security First

-0.4

Correlation Coefficient

Origin Materials  Security First

Very good diversification

The 3 months correlation between Origin and Security is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials and Security First Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security First Intl 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 Security First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security First Intl has no effect on the direction of Origin Materials i.e., Origin Materials and Security First go up and down completely randomly.

Pair Corralation between Origin Materials and Security First

Given the investment horizon of 90 days Origin Materials is expected to generate 2.62 times less return on investment than Security First. But when comparing it to its historical volatility, Origin Materials is 1.91 times less risky than Security First. It trades about 0.05 of its potential returns per unit of risk. Security First Intl is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Security First Intl on May 1, 2025 and sell it today you would earn a total of  1.00  from holding Security First Intl or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Origin Materials  vs.  Security First Intl

Origin Materials

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Origin Materials displayed solid returns over the last few months and may actually be approaching a breakup point.

Security First Intl

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Security First Intl are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Security First reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Origin Materials and Security First

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

The idea behind Origin Materials and Security First Intl 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.