Correlation Between China Green and Itafos
Can any of the company-specific risk be diversified away by investing in both China Green and Itafos 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 China Green and Itafos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Green Agriculture and Itafos Inc, you can compare the effects of market volatilities on China Green and Itafos 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 China Green with a short position of Itafos. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Green and Itafos.
Diversification Opportunities for China Green and Itafos
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Itafos is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding China Green Agriculture and Itafos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos Inc and China Green 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 China Green Agriculture are associated (or correlated) with Itafos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Inc has no effect on the direction of China Green i.e., China Green and Itafos go up and down completely randomly.
Pair Corralation between China Green and Itafos
Considering the 90-day investment horizon China Green is expected to generate 3.97 times less return on investment than Itafos. In addition to that, China Green is 2.17 times more volatile than Itafos Inc. It trades about 0.01 of its total potential returns per unit of risk. Itafos Inc is currently generating about 0.04 per unit of volatility. If you would invest 116.00 in Itafos Inc on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Itafos Inc or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
China Green Agriculture vs. Itafos Inc
Performance |
| Timeline |
| China Green Agriculture |
| Itafos Inc |
China Green and Itafos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Green and Itafos
The main advantage of trading using opposite China Green and Itafos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Green position performs unexpectedly, Itafos 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 Itafos will offset losses from the drop in Itafos' long position.| China Green vs. KS AG DRC | China Green vs. Intrepid Potash | China Green vs. Bioceres Crop Solutions | China Green vs. American Vanguard |
| Itafos vs. Danakali | Itafos vs. Intrepid Potash | Itafos vs. Verde Agritech | Itafos vs. Yara International ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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