Correlation Between Origin Agritech and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and HYDROFARM HLD 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 HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and HYDROFARM HLD GRP, you can compare the effects of market volatilities on Origin Agritech and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and HYDROFARM HLD.
Diversification Opportunities for Origin Agritech and HYDROFARM HLD
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and HYDROFARM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of Origin Agritech i.e., Origin Agritech and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between Origin Agritech and HYDROFARM HLD
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the HYDROFARM HLD. But the stock apears to be less risky and, when comparing its historical volatility, Origin Agritech is 1.28 times less risky than HYDROFARM HLD. The stock trades about -0.16 of its potential returns per unit of risk. The HYDROFARM HLD GRP is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 61.00 in HYDROFARM HLD GRP on August 25, 2024 and sell it today you would lose (3.00) from holding HYDROFARM HLD GRP or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| Origin Agritech |
| HYDROFARM HLD GRP |
Origin Agritech and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and HYDROFARM HLD
The main advantage of trading using opposite Origin Agritech and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD'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 |
| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. NMI Holdings | HYDROFARM HLD 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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