Correlation Between Origin Agritech and PayPal Holdings
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and PayPal Holdings 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 PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and PayPal Holdings, you can compare the effects of market volatilities on Origin Agritech and PayPal Holdings 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 PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and PayPal Holdings.
Diversification Opportunities for Origin Agritech and PayPal Holdings
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and PayPal is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings 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 PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Origin Agritech i.e., Origin Agritech and PayPal Holdings go up and down completely randomly.
Pair Corralation between Origin Agritech and PayPal Holdings
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the PayPal Holdings. In addition to that, Origin Agritech is 1.57 times more volatile than PayPal Holdings. It trades about -0.04 of its total potential returns per unit of risk. PayPal Holdings is currently generating about 0.11 per unit of volatility. If you would invest 7,868 in PayPal Holdings on August 29, 2024 and sell it today you would earn a total of 426.00 from holding PayPal Holdings or generate 5.41% 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. PayPal Holdings
Performance |
| Timeline |
| Origin Agritech |
| PayPal Holdings |
Origin Agritech and PayPal Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and PayPal Holdings
The main advantage of trading using opposite Origin Agritech and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, PayPal Holdings 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 PayPal Holdings will offset losses from the drop in PayPal Holdings' 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 |
| PayPal Holdings vs. Superior Plus Corp | PayPal Holdings vs. NMI Holdings | PayPal Holdings vs. Origin Agritech | PayPal Holdings 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 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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