Correlation Between Origin Agritech and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Grupo Carso 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 Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Grupo Carso SAB, you can compare the effects of market volatilities on Origin Agritech and Grupo Carso 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 Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Grupo Carso.
Diversification Opportunities for Origin Agritech and Grupo Carso
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and Grupo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Origin Agritech i.e., Origin Agritech and Grupo Carso go up and down completely randomly.
Pair Corralation between Origin Agritech and Grupo Carso
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Grupo Carso. In addition to that, Origin Agritech is 1.56 times more volatile than Grupo Carso SAB. It trades about -0.04 of its total potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.02 per unit of volatility. If you would invest 545.00 in Grupo Carso SAB on August 29, 2024 and sell it today you would lose (10.00) from holding Grupo Carso SAB or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Grupo Carso SAB
Performance |
| Timeline |
| Origin Agritech |
| Grupo Carso SAB |
Origin Agritech and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Grupo Carso
The main advantage of trading using opposite Origin Agritech and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso'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 |
| Grupo Carso vs. SENECA FOODS A | Grupo Carso vs. TIANDE CHEMICAL | Grupo Carso vs. Sumitomo Chemical | Grupo Carso vs. Solstad Offshore ASA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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