Correlation Between Origin Agritech and PT Global
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and PT Global 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 PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and PT Global Mediacom, you can compare the effects of market volatilities on Origin Agritech and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and PT Global.
Diversification Opportunities for Origin Agritech and PT Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and 06L is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Origin Agritech i.e., Origin Agritech and PT Global go up and down completely randomly.
Pair Corralation between Origin Agritech and PT Global
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the PT Global. But the stock apears to be less risky and, when comparing its historical volatility, Origin Agritech is 10.02 times less risky than PT Global. The stock trades about -0.04 of its potential returns per unit of risk. The PT Global Mediacom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.55 in PT Global Mediacom on January 16, 2025 and sell it today you would lose (0.40) from holding PT Global Mediacom or give up 72.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. PT Global Mediacom
Performance |
| Timeline |
| Origin Agritech |
| PT Global Mediacom |
Origin Agritech and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and PT Global
The main advantage of trading using opposite Origin Agritech and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| Origin Agritech vs. Major Drilling Group | Origin Agritech vs. NorAm Drilling AS | Origin Agritech vs. alstria office REIT AG | Origin Agritech vs. Aedas Homes SA |
| PT Global vs. Netflix | PT Global vs. Warner Music Group | PT Global vs. ViacomCBS | PT Global vs. SIVERS SEMICONDUCTORS AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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