Correlation Between Origin Agritech and Jerónimo Martins
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Jerónimo Martins 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 Jerónimo Martins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Jernimo Martins SGPS, you can compare the effects of market volatilities on Origin Agritech and Jerónimo Martins 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 Jerónimo Martins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Jerónimo Martins.
Diversification Opportunities for Origin Agritech and Jerónimo Martins
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and Jerónimo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Jernimo Martins SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jernimo Martins SGPS 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 Jerónimo Martins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jernimo Martins SGPS has no effect on the direction of Origin Agritech i.e., Origin Agritech and Jerónimo Martins go up and down completely randomly.
Pair Corralation between Origin Agritech and Jerónimo Martins
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.0 times more return on investment than Jerónimo Martins. However, Origin Agritech is 3.0 times more volatile than Jernimo Martins SGPS. It trades about 0.0 of its potential returns per unit of risk. Jernimo Martins SGPS is currently generating about 0.0 per unit of risk. If you would invest 310.00 in Origin Agritech on September 3, 2024 and sell it today you would lose (68.00) from holding Origin Agritech or give up 21.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Jernimo Martins SGPS
Performance |
| Timeline |
| Origin Agritech |
| Jernimo Martins SGPS |
Origin Agritech and Jerónimo Martins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Jerónimo Martins
The main advantage of trading using opposite Origin Agritech and Jerónimo Martins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Jerónimo Martins 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 Jerónimo Martins will offset losses from the drop in Jerónimo Martins' 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 |
| Jerónimo Martins vs. Performance Food Group | Jerónimo Martins vs. Superior Plus Corp | Jerónimo Martins vs. NMI Holdings | Jerónimo Martins 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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