Correlation Between Origin Agritech and ABB PAR
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and ABB PAR 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 ABB PAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and ABB PAR AB, you can compare the effects of market volatilities on Origin Agritech and ABB PAR 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 ABB PAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and ABB PAR.
Diversification Opportunities for Origin Agritech and ABB PAR
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and ABB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ABB PAR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB PAR AB 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 ABB PAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB PAR AB has no effect on the direction of Origin Agritech i.e., Origin Agritech and ABB PAR go up and down completely randomly.
Pair Corralation between Origin Agritech and ABB PAR
Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.18 times more return on investment than ABB PAR. However, Origin Agritech is 4.18 times more volatile than ABB PAR AB. It trades about 0.16 of its potential returns per unit of risk. ABB PAR AB is currently generating about 0.13 per unit of risk. If you would invest 195.00 in Origin Agritech on November 7, 2024 and sell it today you would earn a total of 41.00 from holding Origin Agritech or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Origin Agritech vs. ABB PAR AB
Performance |
| Timeline |
| Origin Agritech |
| ABB PAR AB |
Origin Agritech and ABB PAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and ABB PAR
The main advantage of trading using opposite Origin Agritech and ABB PAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, ABB PAR 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 ABB PAR will offset losses from the drop in ABB PAR's long position.| Origin Agritech vs. DICKS Sporting Goods | Origin Agritech vs. Sixt Leasing SE | Origin Agritech vs. SCIENCE IN SPORT | Origin Agritech vs. TITANIUM TRANSPORTGROUP |
| ABB PAR vs. Take Two Interactive Software | ABB PAR vs. Genscript Biotech | ABB PAR vs. ATOSS SOFTWARE | ABB PAR vs. Sunny Optical Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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