Correlation Between Origin Agritech and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Consolidated Communications 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 Consolidated Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Consolidated Communications Holdings, you can compare the effects of market volatilities on Origin Agritech and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Consolidated Communications.
Diversification Opportunities for Origin Agritech and Consolidated Communications
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Consolidated is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of Origin Agritech i.e., Origin Agritech and Consolidated Communications go up and down completely randomly.
Pair Corralation between Origin Agritech and Consolidated Communications
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.07 times less return on investment than Consolidated Communications. In addition to that, Origin Agritech is 4.85 times more volatile than Consolidated Communications Holdings. It trades about 0.01 of its total potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.07 per unit of volatility. If you would invest 328.00 in Consolidated Communications Holdings on September 3, 2024 and sell it today you would earn a total of 114.00 from holding Consolidated Communications Holdings or generate 34.76% 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. Consolidated Communications Ho
Performance |
| Timeline |
| Origin Agritech |
| Consolidated Communications |
Origin Agritech and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Consolidated Communications
The main advantage of trading using opposite Origin Agritech and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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