Correlation Between NAKED WINES and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and Origin Agritech, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Origin Agritech.
Diversification Opportunities for NAKED WINES and Origin Agritech
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NAKED and Origin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Origin Agritech go up and down completely randomly.
Pair Corralation between NAKED WINES and Origin Agritech
Assuming the 90 days horizon NAKED WINES PLC is expected to generate 0.73 times more return on investment than Origin Agritech. However, NAKED WINES PLC is 1.37 times less risky than Origin Agritech. It trades about -0.01 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.06 per unit of risk. If you would invest 61.00 in NAKED WINES PLC on August 28, 2024 and sell it today you would lose (2.00) from holding NAKED WINES PLC or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Origin Agritech
Performance |
| Timeline |
| NAKED WINES PLC |
| Origin Agritech |
NAKED WINES and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Origin Agritech
The main advantage of trading using opposite NAKED WINES and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech | NAKED WINES vs. SIVERS SEMICONDUCTORS AB |
| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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