Correlation Between Origin Agritech and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and ASSA ABLOY 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 ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and ASSA ABLOY AB, you can compare the effects of market volatilities on Origin Agritech and ASSA ABLOY 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 ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and ASSA ABLOY.
Diversification Opportunities for Origin Agritech and ASSA ABLOY
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and ASSA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY 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 ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of Origin Agritech i.e., Origin Agritech and ASSA ABLOY go up and down completely randomly.
Pair Corralation between Origin Agritech and ASSA ABLOY
Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.79 times more return on investment than ASSA ABLOY. However, Origin Agritech is 4.79 times more volatile than ASSA ABLOY AB. It trades about 0.04 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.08 per unit of risk. If you would invest 159.00 in Origin Agritech on October 16, 2024 and sell it today you would earn a total of 26.00 from holding Origin Agritech or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. ASSA ABLOY AB
Performance |
| Timeline |
| Origin Agritech |
| ASSA ABLOY AB |
Origin Agritech and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and ASSA ABLOY
The main advantage of trading using opposite Origin Agritech and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| Origin Agritech vs. Commonwealth Bank of | Origin Agritech vs. Sunny Optical Technology | Origin Agritech vs. ORMAT TECHNOLOGIES | Origin Agritech vs. Sun Life Financial |
| ASSA ABLOY vs. SIDETRADE EO 1 | ASSA ABLOY vs. Tencent Music Entertainment | ASSA ABLOY vs. KENEDIX OFFICE INV | ASSA ABLOY vs. Zoom Video Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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