Correlation Between Origin Agritech and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Treasury Wine 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 Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Treasury Wine Estates, you can compare the effects of market volatilities on Origin Agritech and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Treasury Wine.
Diversification Opportunities for Origin Agritech and Treasury Wine
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and Treasury is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Origin Agritech i.e., Origin Agritech and Treasury Wine go up and down completely randomly.
Pair Corralation between Origin Agritech and Treasury Wine
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Treasury Wine. In addition to that, Origin Agritech is 2.18 times more volatile than Treasury Wine Estates. It trades about -0.16 of its total potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.13 per unit of volatility. If you would invest 720.00 in Treasury Wine Estates on August 25, 2024 and sell it today you would lose (38.00) from holding Treasury Wine Estates or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Treasury Wine Estates
Performance |
| Timeline |
| Origin Agritech |
| Treasury Wine Estates |
Origin Agritech and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Treasury Wine
The main advantage of trading using opposite Origin Agritech and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| Treasury Wine vs. Scientific Games | Treasury Wine vs. Rogers Communications | Treasury Wine vs. China Communications Services | Treasury Wine vs. QIIWI GAMES AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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