Correlation Between Origin Agritech and Ares Management
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Ares Management 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 Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Ares Management Corp, you can compare the effects of market volatilities on Origin Agritech and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Ares Management.
Diversification Opportunities for Origin Agritech and Ares Management
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and Ares is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp 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 Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of Origin Agritech i.e., Origin Agritech and Ares Management go up and down completely randomly.
Pair Corralation between Origin Agritech and Ares Management
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Ares Management. In addition to that, Origin Agritech is 1.3 times more volatile than Ares Management Corp. It trades about -0.04 of its total potential returns per unit of risk. Ares Management Corp is currently generating about 0.13 per unit of volatility. If you would invest 15,800 in Ares Management Corp on August 28, 2024 and sell it today you would earn a total of 1,204 from holding Ares Management Corp or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Ares Management Corp
Performance |
| Timeline |
| Origin Agritech |
| Ares Management Corp |
Origin Agritech and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Ares Management
The main advantage of trading using opposite Origin Agritech and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| Ares Management vs. The Bank of | Ares Management vs. Superior Plus Corp | Ares Management vs. NMI Holdings | Ares Management vs. Origin Agritech |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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