Correlation Between COFCO Joycome and Orsted AS
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Orsted AS 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 COFCO Joycome and Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Orsted AS, you can compare the effects of market volatilities on COFCO Joycome and Orsted AS 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 COFCO Joycome with a short position of Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Orsted AS.
Diversification Opportunities for COFCO Joycome and Orsted AS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COFCO and Orsted is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Orsted AS go up and down completely randomly.
Pair Corralation between COFCO Joycome and Orsted AS
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Orsted AS. In addition to that, COFCO Joycome is 1.17 times more volatile than Orsted AS. It trades about -0.02 of its total potential returns per unit of risk. Orsted AS is currently generating about -0.02 per unit of volatility. If you would invest 7,669 in Orsted AS on October 7, 2024 and sell it today you would lose (3,086) from holding Orsted AS or give up 40.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Orsted AS
Performance |
| Timeline |
| COFCO Joycome Foods |
| Orsted AS |
COFCO Joycome and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Orsted AS
The main advantage of trading using opposite COFCO Joycome and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Orsted AS 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 Orsted AS will offset losses from the drop in Orsted AS's long position.| COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. NMI Holdings | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. Talanx AG |
| Orsted AS vs. National Retail Properties | Orsted AS vs. Suntory Beverage Food | Orsted AS vs. MARKET VECTR RETAIL | Orsted AS vs. THAI BEVERAGE |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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