Correlation Between Origin Agritech and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and SOGECLAIR 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 SOGECLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and SOGECLAIR SA INH, you can compare the effects of market volatilities on Origin Agritech and SOGECLAIR 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 SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and SOGECLAIR.
Diversification Opportunities for Origin Agritech and SOGECLAIR
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and SOGECLAIR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Origin Agritech i.e., Origin Agritech and SOGECLAIR go up and down completely randomly.
Pair Corralation between Origin Agritech and SOGECLAIR
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.35 times more return on investment than SOGECLAIR. However, Origin Agritech is 3.35 times more volatile than SOGECLAIR SA INH. It trades about 0.04 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.02 per unit of risk. If you would invest 198.00 in Origin Agritech on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Origin Agritech or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. SOGECLAIR SA INH
Performance |
| Timeline |
| Origin Agritech |
| SOGECLAIR SA INH |
Origin Agritech and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and SOGECLAIR
The main advantage of trading using opposite Origin Agritech and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| Origin Agritech vs. ITALIAN WINE BRANDS | Origin Agritech vs. Treasury Wine Estates | Origin Agritech vs. UPDATE SOFTWARE | Origin Agritech vs. Aegean Airlines SA |
| SOGECLAIR vs. Airbus SE | SOGECLAIR vs. General Dynamics | SOGECLAIR vs. Superior Plus Corp | SOGECLAIR 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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