Correlation Between Origin Agritech and Freshpet
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Freshpet 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 Freshpet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Freshpet, you can compare the effects of market volatilities on Origin Agritech and Freshpet 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 Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Freshpet.
Diversification Opportunities for Origin Agritech and Freshpet
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Freshpet is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet 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 Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of Origin Agritech i.e., Origin Agritech and Freshpet go up and down completely randomly.
Pair Corralation between Origin Agritech and Freshpet
Assuming the 90 days trading horizon Origin Agritech is expected to generate 5.57 times more return on investment than Freshpet. However, Origin Agritech is 5.57 times more volatile than Freshpet. It trades about 0.08 of its potential returns per unit of risk. Freshpet is currently generating about 0.43 per unit of risk. If you would invest 196.00 in Origin Agritech on November 4, 2024 and sell it today you would earn a total of 14.00 from holding Origin Agritech or generate 7.14% 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. Freshpet
Performance |
| Timeline |
| Origin Agritech |
| Freshpet |
Origin Agritech and Freshpet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Freshpet
The main advantage of trading using opposite Origin Agritech and Freshpet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Freshpet 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 Freshpet will offset losses from the drop in Freshpet's long position.| Origin Agritech vs. Solstad Offshore ASA | Origin Agritech vs. G8 EDUCATION | Origin Agritech vs. Perdoceo Education | Origin Agritech vs. Eidesvik Offshore ASA |
| Freshpet vs. Infrastrutture Wireless Italiane | Freshpet vs. Wenzhou Kangning Hospital | Freshpet vs. KENEDIX OFFICE INV | Freshpet vs. SHIP HEALTHCARE HLDGINC |
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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