Correlation Between Origin Agritech and Sinotruk
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Sinotruk 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 Sinotruk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Sinotruk Limited, you can compare the effects of market volatilities on Origin Agritech and Sinotruk 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 Sinotruk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Sinotruk.
Diversification Opportunities for Origin Agritech and Sinotruk
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Sinotruk is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Sinotruk Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinotruk Limited 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 Sinotruk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinotruk Limited has no effect on the direction of Origin Agritech i.e., Origin Agritech and Sinotruk go up and down completely randomly.
Pair Corralation between Origin Agritech and Sinotruk
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Sinotruk. In addition to that, Origin Agritech is 1.36 times more volatile than Sinotruk Limited. It trades about -0.01 of its total potential returns per unit of risk. Sinotruk Limited is currently generating about 0.08 per unit of volatility. If you would invest 72.00 in Sinotruk Limited on November 19, 2024 and sell it today you would earn a total of 192.00 from holding Sinotruk Limited or generate 266.67% 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. Sinotruk Limited
Performance |
| Timeline |
| Origin Agritech |
| Sinotruk Limited |
Origin Agritech and Sinotruk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Sinotruk
The main advantage of trading using opposite Origin Agritech and Sinotruk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Sinotruk 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 Sinotruk will offset losses from the drop in Sinotruk's long position.| Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. MACOM Technology Solutions | Origin Agritech vs. Sunny Optical Technology | Origin Agritech vs. Cogent Communications Holdings |
| Sinotruk vs. Zijin Mining Group | Sinotruk vs. CORNISH METALS INC | Sinotruk vs. Japan Asia Investment | Sinotruk vs. ARDAGH METAL PACDL 0001 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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