Correlation Between Origin Agritech and Perusahaan Perseroan
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Perusahaan Perseroan 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 Origin Agritech and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Perusahaan Perseroan PT, you can compare the effects of market volatilities on Origin Agritech and Perusahaan Perseroan 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 Origin Agritech with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Perusahaan Perseroan.
Diversification Opportunities for Origin Agritech and Perusahaan Perseroan
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Origin and Perusahaan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and Origin Agritech 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 Origin Agritech are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Origin Agritech i.e., Origin Agritech and Perusahaan Perseroan go up and down completely randomly.
Pair Corralation between Origin Agritech and Perusahaan Perseroan
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Perusahaan Perseroan. In addition to that, Origin Agritech is 2.02 times more volatile than Perusahaan Perseroan PT. It trades about -0.06 of its total potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about 0.01 per unit of volatility. If you would invest 1,631 in Perusahaan Perseroan PT on March 16, 2024 and sell it today you would lose (1.00) from holding Perusahaan Perseroan PT or give up 0.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 91.3% |
Values | Daily Returns |
Origin Agritech vs. Perusahaan Perseroan PT
Performance |
Timeline |
Origin Agritech |
Perusahaan Perseroan |
Origin Agritech and Perusahaan Perseroan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Agritech and Perusahaan Perseroan
The main advantage of trading using opposite Origin Agritech and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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