Correlation Between Seiko Epson and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Seiko Epson 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 Seiko Epson and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seiko Epson and Origin Agritech, you can compare the effects of market volatilities on Seiko Epson 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 Seiko Epson with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seiko Epson and Origin Agritech.
Diversification Opportunities for Seiko Epson and Origin Agritech
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seiko and Origin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seiko Epson and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Seiko Epson 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 Seiko Epson 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 Seiko Epson i.e., Seiko Epson and Origin Agritech go up and down completely randomly.
Pair Corralation between Seiko Epson and Origin Agritech
Assuming the 90 days horizon Seiko Epson is expected to generate 0.35 times more return on investment than Origin Agritech. However, Seiko Epson is 2.84 times less risky than Origin Agritech. It trades about 0.05 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.04 per unit of risk. If you would invest 1,640 in Seiko Epson on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Seiko Epson or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seiko Epson vs. Origin Agritech
Performance |
| Timeline |
| Seiko Epson |
| Origin Agritech |
Seiko Epson and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seiko Epson and Origin Agritech
The main advantage of trading using opposite Seiko Epson and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seiko Epson 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.| Seiko Epson vs. Iridium Communications | Seiko Epson vs. United Breweries Co | Seiko Epson vs. China Resources Beer | Seiko Epson vs. BOSTON BEER A |
| Origin Agritech vs. Playtech plc | Origin Agritech vs. AAC TECHNOLOGHLDGADR | Origin Agritech vs. SCANDMEDICAL SOLDK 040 | Origin Agritech vs. ONWARD MEDICAL BV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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