Correlation Between Origin Agritech and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Origin Agritech and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and PARKEN Sport.
Diversification Opportunities for Origin Agritech and PARKEN Sport
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and PARKEN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Origin Agritech i.e., Origin Agritech and PARKEN Sport go up and down completely randomly.
Pair Corralation between Origin Agritech and PARKEN Sport
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.42 times less return on investment than PARKEN Sport. But when comparing it to its historical volatility, Origin Agritech is 1.18 times less risky than PARKEN Sport. It trades about 0.05 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 801.00 in PARKEN Sport Entertainment on August 27, 2024 and sell it today you would earn a total of 814.00 from holding PARKEN Sport Entertainment or generate 101.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Origin Agritech |
| PARKEN Sport Enterta |
Origin Agritech and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and PARKEN Sport
The main advantage of trading using opposite Origin Agritech and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Origin Agritech vs. ECHO INVESTMENT ZY | Origin Agritech vs. Penn National Gaming | Origin Agritech vs. HOCHSCHILD MINING | Origin Agritech vs. Strategic Investments AS |
| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings | PARKEN Sport vs. Origin Agritech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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