Correlation Between Origin Agritech and UNIVMUSIC GRPADR/050
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and UNIVMUSIC GRPADR/050 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 Agritech and UNIVMUSIC GRPADR/050 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on Origin Agritech and UNIVMUSIC GRPADR/050 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 Agritech with a short position of UNIVMUSIC GRPADR/050. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and UNIVMUSIC GRPADR/050.
Diversification Opportunities for Origin Agritech and UNIVMUSIC GRPADR/050
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and UNIVMUSIC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR/050 and Origin Agritech 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 Agritech are associated (or correlated) with UNIVMUSIC GRPADR/050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR/050 has no effect on the direction of Origin Agritech i.e., Origin Agritech and UNIVMUSIC GRPADR/050 go up and down completely randomly.
Pair Corralation between Origin Agritech and UNIVMUSIC GRPADR/050
Assuming the 90 days trading horizon Origin Agritech is expected to generate 2.37 times more return on investment than UNIVMUSIC GRPADR/050. However, Origin Agritech is 2.37 times more volatile than UNIVMUSIC GRPADR050. It trades about -0.04 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about -0.17 per unit of risk. If you would invest 246.00 in Origin Agritech on August 28, 2024 and sell it today you would lose (12.00) from holding Origin Agritech or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. UNIVMUSIC GRPADR050
Performance |
| Timeline |
| Origin Agritech |
| UNIVMUSIC GRPADR/050 |
Origin Agritech and UNIVMUSIC GRPADR/050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and UNIVMUSIC GRPADR/050
The main advantage of trading using opposite Origin Agritech and UNIVMUSIC GRPADR/050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050 will offset losses from the drop in UNIVMUSIC GRPADR/050's long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| UNIVMUSIC GRPADR/050 vs. The Walt Disney | UNIVMUSIC GRPADR/050 vs. Superior Plus Corp | UNIVMUSIC GRPADR/050 vs. NMI Holdings | UNIVMUSIC GRPADR/050 vs. Origin Agritech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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