Correlation Between Origin Agritech and FREY EO
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and FREY EO 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 FREY EO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and FREY EO 250, you can compare the effects of market volatilities on Origin Agritech and FREY EO 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 FREY EO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and FREY EO.
Diversification Opportunities for Origin Agritech and FREY EO
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and FREY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and FREY EO 250 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREY EO 250 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 FREY EO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREY EO 250 has no effect on the direction of Origin Agritech i.e., Origin Agritech and FREY EO go up and down completely randomly.
Pair Corralation between Origin Agritech and FREY EO
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the FREY EO. In addition to that, Origin Agritech is 4.69 times more volatile than FREY EO 250. It trades about -0.01 of its total potential returns per unit of risk. FREY EO 250 is currently generating about -0.01 per unit of volatility. If you would invest 3,053 in FREY EO 250 on September 5, 2024 and sell it today you would lose (273.00) from holding FREY EO 250 or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. FREY EO 250
Performance |
| Timeline |
| Origin Agritech |
| FREY EO 250 |
Origin Agritech and FREY EO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and FREY EO
The main advantage of trading using opposite Origin Agritech and FREY EO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, FREY EO 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 FREY EO will offset losses from the drop in FREY EO's long position.| Origin Agritech vs. NISSIN FOODS HLDGS | Origin Agritech vs. Ebro Foods SA | Origin Agritech vs. Tyson Foods | Origin Agritech vs. CAL MAINE FOODS |
| FREY EO vs. WFD Unibail Rodamco | FREY EO vs. Superior Plus Corp | FREY EO vs. Origin Agritech | FREY EO vs. Identiv |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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