Correlation Between Mosaic and China Green
Can any of the company-specific risk be diversified away by investing in both Mosaic and China Green 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 Mosaic and China Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mosaic and China Green Agriculture, you can compare the effects of market volatilities on Mosaic and China Green 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 Mosaic with a short position of China Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mosaic and China Green.
Diversification Opportunities for Mosaic and China Green
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mosaic and China is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and China Green Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Green Agriculture and Mosaic 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 The Mosaic are associated (or correlated) with China Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Green Agriculture has no effect on the direction of Mosaic i.e., Mosaic and China Green go up and down completely randomly.
Pair Corralation between Mosaic and China Green
Considering the 90-day investment horizon The Mosaic is expected to under-perform the China Green. But the stock apears to be less risky and, when comparing its historical volatility, The Mosaic is 1.99 times less risky than China Green. The stock trades about -0.06 of its potential returns per unit of risk. The China Green Agriculture is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 190.00 in China Green Agriculture on August 27, 2024 and sell it today you would earn a total of 8.00 from holding China Green Agriculture or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mosaic vs. China Green Agriculture
Performance |
| Timeline |
| Mosaic |
| China Green Agriculture |
Mosaic and China Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mosaic and China Green
The main advantage of trading using opposite Mosaic and China Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic position performs unexpectedly, China Green 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 China Green will offset losses from the drop in China Green's long position.The idea behind The Mosaic and China Green Agriculture 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |