Correlation Between Orinko Advanced and Guangdong Marubi
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By analyzing existing cross correlation between Orinko Advanced Plastics and Guangdong Marubi Biotechnology, you can compare the effects of market volatilities on Orinko Advanced and Guangdong Marubi 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 Orinko Advanced with a short position of Guangdong Marubi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orinko Advanced and Guangdong Marubi.
Diversification Opportunities for Orinko Advanced and Guangdong Marubi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orinko and Guangdong is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Orinko Advanced Plastics and Guangdong Marubi Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Marubi Bio and Orinko Advanced 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 Orinko Advanced Plastics are associated (or correlated) with Guangdong Marubi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Marubi Bio has no effect on the direction of Orinko Advanced i.e., Orinko Advanced and Guangdong Marubi go up and down completely randomly.
Pair Corralation between Orinko Advanced and Guangdong Marubi
Assuming the 90 days trading horizon Orinko Advanced Plastics is expected to generate 1.08 times more return on investment than Guangdong Marubi. However, Orinko Advanced is 1.08 times more volatile than Guangdong Marubi Biotechnology. It trades about 0.02 of its potential returns per unit of risk. Guangdong Marubi Biotechnology is currently generating about -0.01 per unit of risk. If you would invest 976.00 in Orinko Advanced Plastics on November 9, 2024 and sell it today you would earn a total of 154.00 from holding Orinko Advanced Plastics or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orinko Advanced Plastics vs. Guangdong Marubi Biotechnology
Performance |
| Timeline |
| Orinko Advanced Plastics |
Risk-Adjusted Performance
OK
Weak | Strong |
| Guangdong Marubi Bio |
Risk-Adjusted Performance
Weak
Weak | Strong |
Orinko Advanced and Guangdong Marubi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orinko Advanced and Guangdong Marubi
The main advantage of trading using opposite Orinko Advanced and Guangdong Marubi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orinko Advanced position performs unexpectedly, Guangdong Marubi 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 Guangdong Marubi will offset losses from the drop in Guangdong Marubi's long position.The idea behind Orinko Advanced Plastics and Guangdong Marubi Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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