Correlation Between Origin Agritech and Food Life
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Food Life 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 Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Food Life Companies, you can compare the effects of market volatilities on Origin Agritech and Food Life 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 Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Food Life.
Diversification Opportunities for Origin Agritech and Food Life
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and Food is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies 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 Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of Origin Agritech i.e., Origin Agritech and Food Life go up and down completely randomly.
Pair Corralation between Origin Agritech and Food Life
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Food Life. In addition to that, Origin Agritech is 1.9 times more volatile than Food Life Companies. It trades about -0.16 of its total potential returns per unit of risk. Food Life Companies is currently generating about 0.12 per unit of volatility. If you would invest 1,780 in Food Life Companies on August 25, 2024 and sell it today you would earn a total of 90.00 from holding Food Life Companies or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Food Life Companies
Performance |
| Timeline |
| Origin Agritech |
| Food Life Companies |
Origin Agritech and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Food Life
The main advantage of trading using opposite Origin Agritech and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings | Food Life vs. Origin Agritech | Food Life 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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