Correlation Between Orion Engineered and Ag Growth
Can any of the company-specific risk be diversified away by investing in both Orion Engineered and Ag Growth 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 Orion Engineered and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Engineered Carbons and Ag Growth International, you can compare the effects of market volatilities on Orion Engineered and Ag Growth 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 Orion Engineered with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Engineered and Ag Growth.
Diversification Opportunities for Orion Engineered and Ag Growth
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orion and AGGZF is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orion Engineered Carbons and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and Orion Engineered 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 Orion Engineered Carbons are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of Orion Engineered i.e., Orion Engineered and Ag Growth go up and down completely randomly.
Pair Corralation between Orion Engineered and Ag Growth
Considering the 90-day investment horizon Orion Engineered Carbons is expected to under-perform the Ag Growth. In addition to that, Orion Engineered is 1.14 times more volatile than Ag Growth International. It trades about -0.02 of its total potential returns per unit of risk. Ag Growth International is currently generating about 0.02 per unit of volatility. If you would invest 3,580 in Ag Growth International on August 24, 2024 and sell it today you would earn a total of 212.00 from holding Ag Growth International or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Orion Engineered Carbons vs. Ag Growth International
Performance |
| Timeline |
| Orion Engineered Carbons |
| Ag Growth International |
Orion Engineered and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Engineered and Ag Growth
The main advantage of trading using opposite Orion Engineered and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Engineered position performs unexpectedly, Ag Growth 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 Ag Growth will offset losses from the drop in Ag Growth's long position.| Orion Engineered vs. Eshallgo Class A | Orion Engineered vs. Amtech Systems | Orion Engineered vs. Gold Fields Ltd | Orion Engineered vs. Aegean Airlines SA |
| Ag Growth vs. Element Solutions | Ag Growth vs. Orion Engineered Carbons | Ag Growth vs. Minerals Technologies | Ag Growth vs. Ingevity Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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