Correlation Between Origin Agritech and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and REINET INVESTMENTS 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 REINET INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and REINET INVESTMENTS SCA, you can compare the effects of market volatilities on Origin Agritech and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and REINET INVESTMENTS.
Diversification Opportunities for Origin Agritech and REINET INVESTMENTS
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and REINET is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of Origin Agritech i.e., Origin Agritech and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between Origin Agritech and REINET INVESTMENTS
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.13 times less return on investment than REINET INVESTMENTS. In addition to that, Origin Agritech is 4.16 times more volatile than REINET INVESTMENTS SCA. It trades about 0.01 of its total potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.06 per unit of volatility. If you would invest 2,460 in REINET INVESTMENTS SCA on August 30, 2024 and sell it today you would earn a total of 40.00 from holding REINET INVESTMENTS SCA or generate 1.63% 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. REINET INVESTMENTS SCA
Performance |
| Timeline |
| Origin Agritech |
| REINET INVESTMENTS SCA |
Origin Agritech and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and REINET INVESTMENTS
The main advantage of trading using opposite Origin Agritech and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
| REINET INVESTMENTS vs. Commonwealth Bank of | REINET INVESTMENTS vs. SK TELECOM TDADR | REINET INVESTMENTS vs. Mizuho Financial Group | REINET INVESTMENTS vs. INTERSHOP Communications Aktiengesellschaft |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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