Correlation Between Origin Agritech and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and COFCO Joycome 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 COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and COFCO Joycome Foods, you can compare the effects of market volatilities on Origin Agritech and COFCO Joycome 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 COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and COFCO Joycome.
Diversification Opportunities for Origin Agritech and COFCO Joycome
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and COFCO is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods 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 COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Origin Agritech i.e., Origin Agritech and COFCO Joycome go up and down completely randomly.
Pair Corralation between Origin Agritech and COFCO Joycome
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.25 times more return on investment than COFCO Joycome. However, Origin Agritech is 1.25 times more volatile than COFCO Joycome Foods. It trades about 0.06 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.05 per unit of risk. If you would invest 232.00 in Origin Agritech on September 3, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. COFCO Joycome Foods
Performance |
| Timeline |
| Origin Agritech |
| COFCO Joycome Foods |
Origin Agritech and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and COFCO Joycome
The main advantage of trading using opposite Origin Agritech and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
| COFCO Joycome vs. Nestl SA | COFCO Joycome vs. Kraft Heinz Co | COFCO Joycome vs. General Mills | COFCO Joycome vs. Kellogg Company |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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