Correlation Between Origin Agritech and Raytheon Technologies
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Raytheon Technologies 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 Raytheon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Raytheon Technologies Corp, you can compare the effects of market volatilities on Origin Agritech and Raytheon Technologies 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 Raytheon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Raytheon Technologies.
Diversification Opportunities for Origin Agritech and Raytheon Technologies
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and Raytheon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Raytheon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytheon Technologies 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 Raytheon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytheon Technologies has no effect on the direction of Origin Agritech i.e., Origin Agritech and Raytheon Technologies go up and down completely randomly.
Pair Corralation between Origin Agritech and Raytheon Technologies
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Raytheon Technologies. In addition to that, Origin Agritech is 2.93 times more volatile than Raytheon Technologies Corp. It trades about -0.07 of its total potential returns per unit of risk. Raytheon Technologies Corp is currently generating about 0.0 per unit of volatility. If you would invest 11,286 in Raytheon Technologies Corp on September 13, 2024 and sell it today you would lose (54.00) from holding Raytheon Technologies Corp or give up 0.48% 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. Raytheon Technologies Corp
Performance |
| Timeline |
| Origin Agritech |
| Raytheon Technologies |
Origin Agritech and Raytheon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Raytheon Technologies
The main advantage of trading using opposite Origin Agritech and Raytheon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Raytheon Technologies 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 Raytheon Technologies will offset losses from the drop in Raytheon Technologies' long position.| Origin Agritech vs. MHP Hotel AG | Origin Agritech vs. G8 EDUCATION | Origin Agritech vs. STRAYER EDUCATION | Origin Agritech vs. DEVRY EDUCATION GRP |
| Raytheon Technologies vs. Airbus SE | Raytheon Technologies vs. General Dynamics | Raytheon Technologies vs. Superior Plus Corp | Raytheon Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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