Correlation Between Origin Agritech and Dno ASA
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Dno ASA 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 Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Dno ASA, you can compare the effects of market volatilities on Origin Agritech and Dno ASA 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 Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Dno ASA.
Diversification Opportunities for Origin Agritech and Dno ASA
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Dno is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA 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 Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of Origin Agritech i.e., Origin Agritech and Dno ASA go up and down completely randomly.
Pair Corralation between Origin Agritech and Dno ASA
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Dno ASA. In addition to that, Origin Agritech is 3.05 times more volatile than Dno ASA. It trades about -0.01 of its total potential returns per unit of risk. Dno ASA is currently generating about 0.02 per unit of volatility. If you would invest 1,265 in Dno ASA on September 4, 2024 and sell it today you would earn a total of 109.00 from holding Dno ASA or generate 8.62% 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. Dno ASA
Performance |
| Timeline |
| Origin Agritech |
| Dno ASA |
Origin Agritech and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Dno ASA
The main advantage of trading using opposite Origin Agritech and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
| Dno ASA vs. PT Astra International | Dno ASA vs. Superior Plus Corp | Dno ASA vs. NMI Holdings | Dno ASA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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