Correlation Between ITALIAN WINE and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and Origin Agritech 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 ITALIAN WINE and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Origin Agritech, you can compare the effects of market volatilities on ITALIAN WINE and Origin Agritech 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 ITALIAN WINE with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Origin Agritech.
Diversification Opportunities for ITALIAN WINE and Origin Agritech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ITALIAN and Origin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Origin Agritech go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Origin Agritech
Assuming the 90 days horizon ITALIAN WINE is expected to generate 2.21 times less return on investment than Origin Agritech. But when comparing it to its historical volatility, ITALIAN WINE BRANDS is 3.91 times less risky than Origin Agritech. It trades about 0.07 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Origin Agritech on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Origin Agritech or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Origin Agritech
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Origin Agritech |
ITALIAN WINE and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Origin Agritech
The main advantage of trading using opposite ITALIAN WINE and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, Origin Agritech 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 Origin Agritech will offset losses from the drop in Origin Agritech's long position.| ITALIAN WINE vs. NAKED WINES PLC | ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. SIVERS SEMICONDUCTORS AB |
| Origin Agritech vs. ITALIAN WINE BRANDS | Origin Agritech vs. Treasury Wine Estates | Origin Agritech vs. UPDATE SOFTWARE | Origin Agritech vs. Aegean Airlines SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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