Correlation Between Origin Agritech and Poste Italiane
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Poste Italiane 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 Poste Italiane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Poste Italiane SpA, you can compare the effects of market volatilities on Origin Agritech and Poste Italiane 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 Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Poste Italiane.
Diversification Opportunities for Origin Agritech and Poste Italiane
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Poste is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Poste Italiane SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poste Italiane SpA 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 Poste Italiane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poste Italiane SpA has no effect on the direction of Origin Agritech i.e., Origin Agritech and Poste Italiane go up and down completely randomly.
Pair Corralation between Origin Agritech and Poste Italiane
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Poste Italiane. In addition to that, Origin Agritech is 4.32 times more volatile than Poste Italiane SpA. It trades about -0.06 of its total potential returns per unit of risk. Poste Italiane SpA is currently generating about 0.15 per unit of volatility. If you would invest 1,222 in Poste Italiane SpA on August 28, 2024 and sell it today you would earn a total of 82.00 from holding Poste Italiane SpA or generate 6.71% 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. Poste Italiane SpA
Performance |
| Timeline |
| Origin Agritech |
| Poste Italiane SpA |
Origin Agritech and Poste Italiane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Poste Italiane
The main advantage of trading using opposite Origin Agritech and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Poste Italiane 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 Poste Italiane will offset losses from the drop in Poste Italiane'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 |
| Poste Italiane vs. Superior Plus Corp | Poste Italiane vs. NMI Holdings | Poste Italiane vs. Origin Agritech | Poste Italiane vs. SIVERS SEMICONDUCTORS AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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