Correlation Between Origin Agritech and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and COSTCO WHOLESALE 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 COSTCO WHOLESALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Origin Agritech and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and COSTCO WHOLESALE.
Diversification Opportunities for Origin Agritech and COSTCO WHOLESALE
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and COSTCO is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Origin Agritech i.e., Origin Agritech and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Origin Agritech and COSTCO WHOLESALE
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the COSTCO WHOLESALE. In addition to that, Origin Agritech is 2.1 times more volatile than COSTCO WHOLESALE CDR. It trades about -0.04 of its total potential returns per unit of risk. COSTCO WHOLESALE CDR is currently generating about 0.24 per unit of volatility. If you would invest 2,715 in COSTCO WHOLESALE CDR on August 29, 2024 and sell it today you would earn a total of 265.00 from holding COSTCO WHOLESALE CDR or generate 9.76% 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. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Origin Agritech |
| COSTCO WHOLESALE CDR |
Origin Agritech and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and COSTCO WHOLESALE
The main advantage of trading using opposite Origin Agritech and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE'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 |
| COSTCO WHOLESALE vs. Superior Plus Corp | COSTCO WHOLESALE vs. NMI Holdings | COSTCO WHOLESALE vs. Origin Agritech | COSTCO WHOLESALE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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