Correlation Between NISSIN FOODS and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS 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 NISSIN FOODS and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSIN FOODS HLDGS and Origin Agritech, you can compare the effects of market volatilities on NISSIN FOODS 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 NISSIN FOODS with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and Origin Agritech.
Diversification Opportunities for NISSIN FOODS and Origin Agritech
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NISSIN and Origin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and NISSIN FOODS 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 NISSIN FOODS HLDGS 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 NISSIN FOODS i.e., NISSIN FOODS and Origin Agritech go up and down completely randomly.
Pair Corralation between NISSIN FOODS and Origin Agritech
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to generate 0.27 times more return on investment than Origin Agritech. However, NISSIN FOODS HLDGS is 3.73 times less risky than Origin Agritech. It trades about 0.1 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.01 per unit of risk. If you would invest 2,400 in NISSIN FOODS HLDGS on September 13, 2024 and sell it today you would earn a total of 60.00 from holding NISSIN FOODS HLDGS or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. Origin Agritech
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| Origin Agritech |
NISSIN FOODS and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and Origin Agritech
The main advantage of trading using opposite NISSIN FOODS and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS 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.| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
| Origin Agritech vs. MHP Hotel AG | Origin Agritech vs. G8 EDUCATION | Origin Agritech vs. STRAYER EDUCATION | Origin Agritech vs. DEVRY EDUCATION GRP |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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