Correlation Between Mizuho Financial and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial 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 Mizuho Financial and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizuho Financial Group and Origin Agritech, you can compare the effects of market volatilities on Mizuho Financial 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 Mizuho Financial with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and Origin Agritech.
Diversification Opportunities for Mizuho Financial and Origin Agritech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mizuho and Origin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Mizuho Financial 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 Mizuho Financial Group 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 Mizuho Financial i.e., Mizuho Financial and Origin Agritech go up and down completely randomly.
Pair Corralation between Mizuho Financial and Origin Agritech
Assuming the 90 days trading horizon Mizuho Financial Group is expected to generate 0.55 times more return on investment than Origin Agritech. However, Mizuho Financial Group is 1.82 times less risky than Origin Agritech. It trades about 0.47 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.04 per unit of risk. If you would invest 368.00 in Mizuho Financial Group on August 29, 2024 and sell it today you would earn a total of 86.00 from holding Mizuho Financial Group or generate 23.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. Origin Agritech
Performance |
| Timeline |
| Mizuho Financial |
| Origin Agritech |
Mizuho Financial and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and Origin Agritech
The main advantage of trading using opposite Mizuho Financial and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial 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.The idea behind Mizuho Financial Group and Origin Agritech 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.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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