Correlation Between Origin Agritech and VOLKSWAGEN ADR
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and VOLKSWAGEN ADR 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 VOLKSWAGEN ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and VOLKSWAGEN ADR 110ON, you can compare the effects of market volatilities on Origin Agritech and VOLKSWAGEN ADR 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 VOLKSWAGEN ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and VOLKSWAGEN ADR.
Diversification Opportunities for Origin Agritech and VOLKSWAGEN ADR
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and VOLKSWAGEN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and VOLKSWAGEN ADR 110ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOLKSWAGEN ADR 110ON 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 VOLKSWAGEN ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOLKSWAGEN ADR 110ON has no effect on the direction of Origin Agritech i.e., Origin Agritech and VOLKSWAGEN ADR go up and down completely randomly.
Pair Corralation between Origin Agritech and VOLKSWAGEN ADR
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.6 times more return on investment than VOLKSWAGEN ADR. However, Origin Agritech is 1.6 times more volatile than VOLKSWAGEN ADR 110ON. It trades about -0.04 of its potential returns per unit of risk. VOLKSWAGEN ADR 110ON is currently generating about -0.21 per unit of risk. If you would invest 246.00 in Origin Agritech on August 28, 2024 and sell it today you would lose (12.00) from holding Origin Agritech or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. VOLKSWAGEN ADR 110ON
Performance |
| Timeline |
| Origin Agritech |
| VOLKSWAGEN ADR 110ON |
Origin Agritech and VOLKSWAGEN ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and VOLKSWAGEN ADR
The main advantage of trading using opposite Origin Agritech and VOLKSWAGEN ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, VOLKSWAGEN ADR 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 VOLKSWAGEN ADR will offset losses from the drop in VOLKSWAGEN ADR's long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| VOLKSWAGEN ADR vs. Superior Plus Corp | VOLKSWAGEN ADR vs. NMI Holdings | VOLKSWAGEN ADR vs. Origin Agritech | VOLKSWAGEN ADR vs. SIVERS SEMICONDUCTORS 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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