Correlation Between Origin Agritech and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and JD SPORTS 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 JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and JD SPORTS FASH, you can compare the effects of market volatilities on Origin Agritech and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and JD SPORTS.
Diversification Opportunities for Origin Agritech and JD SPORTS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and 9JD is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of Origin Agritech i.e., Origin Agritech and JD SPORTS go up and down completely randomly.
Pair Corralation between Origin Agritech and JD SPORTS
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the JD SPORTS. In addition to that, Origin Agritech is 1.98 times more volatile than JD SPORTS FASH. It trades about -0.02 of its total potential returns per unit of risk. JD SPORTS FASH is currently generating about 0.0 per unit of volatility. If you would invest 146.00 in JD SPORTS FASH on August 27, 2024 and sell it today you would lose (33.00) from holding JD SPORTS FASH or give up 22.6% 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. JD SPORTS FASH
Performance |
| Timeline |
| Origin Agritech |
| JD SPORTS FASH |
Origin Agritech and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and JD SPORTS
The main advantage of trading using opposite Origin Agritech and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
| JD SPORTS vs. Nippon Steel | JD SPORTS vs. Nok Airlines PCL | JD SPORTS vs. American Airlines Group | JD SPORTS vs. JAPAN AIRLINES |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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