Correlation Between Origin Agritech and Allstate
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Allstate 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 Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and The Allstate, you can compare the effects of market volatilities on Origin Agritech and Allstate 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 Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Allstate.
Diversification Opportunities for Origin Agritech and Allstate
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Allstate is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate 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 Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of Origin Agritech i.e., Origin Agritech and Allstate go up and down completely randomly.
Pair Corralation between Origin Agritech and Allstate
Assuming the 90 days trading horizon Origin Agritech is expected to generate 14.21 times less return on investment than Allstate. In addition to that, Origin Agritech is 3.99 times more volatile than The Allstate. It trades about 0.0 of its total potential returns per unit of risk. The Allstate is currently generating about 0.12 per unit of volatility. If you would invest 10,048 in The Allstate on August 31, 2024 and sell it today you would earn a total of 9,582 from holding The Allstate or generate 95.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Origin Agritech vs. The Allstate
Performance |
| Timeline |
| Origin Agritech |
| Allstate |
Origin Agritech and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Allstate
The main advantage of trading using opposite Origin Agritech and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Allstate 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 Allstate will offset losses from the drop in Allstate's long position.| Origin Agritech vs. FORMPIPE SOFTWARE AB | Origin Agritech vs. PTT Global Chemical | Origin Agritech vs. Magic Software Enterprises | Origin Agritech vs. UPDATE SOFTWARE |
| Allstate vs. The Progressive | Allstate vs. Fairfax Financial Holdings | Allstate vs. Insurance Australia Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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