Correlation Between Origin Agritech and Airbus SE
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Airbus SE 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 Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Airbus SE, you can compare the effects of market volatilities on Origin Agritech and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Airbus SE.
Diversification Opportunities for Origin Agritech and Airbus SE
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Airbus is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Origin Agritech i.e., Origin Agritech and Airbus SE go up and down completely randomly.
Pair Corralation between Origin Agritech and Airbus SE
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Airbus SE. In addition to that, Origin Agritech is 2.53 times more volatile than Airbus SE. It trades about -0.19 of its total potential returns per unit of risk. Airbus SE is currently generating about -0.01 per unit of volatility. If you would invest 14,104 in Airbus SE on August 24, 2024 and sell it today you would lose (108.00) from holding Airbus SE or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Agritech vs. Airbus SE
Performance |
| Timeline |
| Origin Agritech |
| Airbus SE |
Origin Agritech and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Airbus SE
The main advantage of trading using opposite Origin Agritech and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Enterprises plc |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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