Correlation Between Origin Agritech and Enel SpA
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Enel SpA 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 Enel SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Enel SpA, you can compare the effects of market volatilities on Origin Agritech and Enel SpA 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 Enel SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Enel SpA.
Diversification Opportunities for Origin Agritech and Enel SpA
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and Enel is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Enel SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel 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 Enel SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel SpA has no effect on the direction of Origin Agritech i.e., Origin Agritech and Enel SpA go up and down completely randomly.
Pair Corralation between Origin Agritech and Enel SpA
Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.3 times more return on investment than Enel SpA. However, Origin Agritech is 4.3 times more volatile than Enel SpA. It trades about 0.04 of its potential returns per unit of risk. Enel SpA is currently generating about -0.08 per unit of risk. If you would invest 238.00 in Origin Agritech on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Origin Agritech or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Agritech vs. Enel SpA
Performance |
| Timeline |
| Origin Agritech |
| Enel SpA |
Origin Agritech and Enel SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Enel SpA
The main advantage of trading using opposite Origin Agritech and Enel SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Enel SpA 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 Enel SpA will offset losses from the drop in Enel SpA's long position.| Origin Agritech vs. CARSALESCOM | Origin Agritech vs. Uber Technologies | Origin Agritech vs. GEELY AUTOMOBILE | Origin Agritech vs. Playtech plc |
| Enel SpA vs. Hyatt Hotels | Enel SpA vs. Applied Materials | Enel SpA vs. Hyster Yale Materials Handling | Enel SpA vs. Dalata Hotel Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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