Correlation Between Orange Juice and Five Year
Can any of the company-specific risk be diversified away by investing in both Orange Juice and Five Year 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 Orange Juice and Five Year into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange Juice and Five Year Treasury Note, you can compare the effects of market volatilities on Orange Juice and Five Year 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 Orange Juice with a short position of Five Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange Juice and Five Year.
Diversification Opportunities for Orange Juice and Five Year
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Orange and Five is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Orange Juice and Five Year Treasury Note in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Year Treasury and Orange Juice 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 Orange Juice are associated (or correlated) with Five Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Year Treasury has no effect on the direction of Orange Juice i.e., Orange Juice and Five Year go up and down completely randomly.
Pair Corralation between Orange Juice and Five Year
Assuming the 90 days horizon Orange Juice is expected to under-perform the Five Year. In addition to that, Orange Juice is 9.25 times more volatile than Five Year Treasury Note. It trades about -0.08 of its total potential returns per unit of risk. Five Year Treasury Note is currently generating about 0.01 per unit of volatility. If you would invest 10,634 in Five Year Treasury Note on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Five Year Treasury Note or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange Juice vs. Five Year Treasury Note
Performance |
| Timeline |
| Orange Juice |
| Five Year Treasury |
Orange Juice and Five Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange Juice and Five Year
The main advantage of trading using opposite Orange Juice and Five Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange Juice position performs unexpectedly, Five Year 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 Five Year will offset losses from the drop in Five Year's long position.| Orange Juice vs. Micro Gold Futures | Orange Juice vs. Natural Gas | Orange Juice vs. Corn Futures | Orange Juice vs. Class III Milk |
| Five Year vs. Mini Dow Jones | Five Year vs. Gasoline RBOB | Five Year vs. Rough Rice Futures | Five Year vs. Platinum |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |