Correlation Between Origin Agritech and AMADEUS IT
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and AMADEUS IT 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 AMADEUS IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and AMADEUS IT GRP, you can compare the effects of market volatilities on Origin Agritech and AMADEUS IT 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 AMADEUS IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and AMADEUS IT.
Diversification Opportunities for Origin Agritech and AMADEUS IT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and AMADEUS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and AMADEUS IT GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMADEUS IT 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 AMADEUS IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMADEUS IT GRP has no effect on the direction of Origin Agritech i.e., Origin Agritech and AMADEUS IT go up and down completely randomly.
Pair Corralation between Origin Agritech and AMADEUS IT
Assuming the 90 days trading horizon Origin Agritech is expected to generate 5.11 times more return on investment than AMADEUS IT. However, Origin Agritech is 5.11 times more volatile than AMADEUS IT GRP. It trades about 0.05 of its potential returns per unit of risk. AMADEUS IT GRP is currently generating about 0.02 per unit of risk. If you would invest 171.00 in Origin Agritech on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Origin Agritech or generate 41.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. AMADEUS IT GRP
Performance |
| Timeline |
| Origin Agritech |
| AMADEUS IT GRP |
Origin Agritech and AMADEUS IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and AMADEUS IT
The main advantage of trading using opposite Origin Agritech and AMADEUS IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, AMADEUS IT 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 AMADEUS IT will offset losses from the drop in AMADEUS IT's long position.| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
| AMADEUS IT vs. FUJITSU LTD ADR | AMADEUS IT vs. Superior Plus Corp | AMADEUS IT vs. NMI Holdings | AMADEUS IT 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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