Correlation Between Richter Gedeon and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Richter Gedeon 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 Richter Gedeon and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richter Gedeon Vegyszeti and Origin Agritech, you can compare the effects of market volatilities on Richter Gedeon 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 Richter Gedeon with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richter Gedeon and Origin Agritech.
Diversification Opportunities for Richter Gedeon and Origin Agritech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Richter and Origin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Richter Gedeon Vegyszeti and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Richter Gedeon 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 Richter Gedeon Vegyszeti 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 Richter Gedeon i.e., Richter Gedeon and Origin Agritech go up and down completely randomly.
Pair Corralation between Richter Gedeon and Origin Agritech
Assuming the 90 days trading horizon Richter Gedeon Vegyszeti is expected to generate 0.36 times more return on investment than Origin Agritech. However, Richter Gedeon Vegyszeti is 2.76 times less risky than Origin Agritech. It trades about 0.18 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.06 per unit of risk. If you would invest 2,526 in Richter Gedeon Vegyszeti on December 1, 2024 and sell it today you would earn a total of 180.00 from holding Richter Gedeon Vegyszeti or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richter Gedeon Vegyszeti vs. Origin Agritech
Performance |
| Timeline |
| Richter Gedeon Vegyszeti |
| Origin Agritech |
Richter Gedeon and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richter Gedeon and Origin Agritech
The main advantage of trading using opposite Richter Gedeon and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richter Gedeon 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.| Richter Gedeon vs. GOLD ROAD RES | Richter Gedeon vs. Gol Intelligent Airlines | Richter Gedeon vs. COPLAND ROAD CAPITAL | Richter Gedeon vs. BROADSTNET LEADL 00025 |
| Origin Agritech vs. ROYAL ROAD MIN | Origin Agritech vs. BJs Restaurants | Origin Agritech vs. BII Railway Transportation | Origin Agritech vs. Transport International Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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