Correlation Between AS Latvijas and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both AS Latvijas 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 AS Latvijas and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AS Latvijas balzams and Origin Agritech, you can compare the effects of market volatilities on AS Latvijas 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 AS Latvijas with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AS Latvijas and Origin Agritech.
Diversification Opportunities for AS Latvijas and Origin Agritech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UM9 and Origin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AS Latvijas balzams and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and AS Latvijas 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 AS Latvijas balzams 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 AS Latvijas i.e., AS Latvijas and Origin Agritech go up and down completely randomly.
Pair Corralation between AS Latvijas and Origin Agritech
Assuming the 90 days trading horizon AS Latvijas is expected to generate 4.09 times less return on investment than Origin Agritech. But when comparing it to its historical volatility, AS Latvijas balzams is 14.31 times less risky than Origin Agritech. It trades about 0.22 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Origin Agritech on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Origin Agritech or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AS Latvijas balzams vs. Origin Agritech
Performance |
| Timeline |
| AS Latvijas balzams |
| Origin Agritech |
AS Latvijas and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AS Latvijas and Origin Agritech
The main advantage of trading using opposite AS Latvijas and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AS Latvijas 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.| AS Latvijas vs. VIRGIN WINES UK | AS Latvijas vs. Superior Plus Corp | AS Latvijas vs. NMI Holdings | AS Latvijas vs. Origin Agritech |
| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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