Correlation Between Origin Agritech and ViacomCBS
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and ViacomCBS 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 ViacomCBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and ViacomCBS, you can compare the effects of market volatilities on Origin Agritech and ViacomCBS 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 ViacomCBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and ViacomCBS.
Diversification Opportunities for Origin Agritech and ViacomCBS
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and ViacomCBS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ViacomCBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViacomCBS 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 ViacomCBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViacomCBS has no effect on the direction of Origin Agritech i.e., Origin Agritech and ViacomCBS go up and down completely randomly.
Pair Corralation between Origin Agritech and ViacomCBS
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.06 times less return on investment than ViacomCBS. In addition to that, Origin Agritech is 2.37 times more volatile than ViacomCBS. It trades about 0.07 of its total potential returns per unit of risk. ViacomCBS is currently generating about 0.19 per unit of volatility. If you would invest 1,986 in ViacomCBS on August 31, 2024 and sell it today you would earn a total of 169.00 from holding ViacomCBS or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. ViacomCBS
Performance |
| Timeline |
| Origin Agritech |
| ViacomCBS |
Origin Agritech and ViacomCBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and ViacomCBS
The main advantage of trading using opposite Origin Agritech and ViacomCBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, ViacomCBS 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 ViacomCBS will offset losses from the drop in ViacomCBS's long position.| Origin Agritech vs. FORMPIPE SOFTWARE AB | Origin Agritech vs. PTT Global Chemical | Origin Agritech vs. Magic Software Enterprises | Origin Agritech vs. UPDATE SOFTWARE |
| ViacomCBS vs. Netflix | ViacomCBS vs. Warner Music Group | ViacomCBS vs. ViacomCBS | ViacomCBS vs. Superior Plus Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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