Correlation Between Origin Agritech and Albemarle
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Albemarle 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 Albemarle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Albemarle, you can compare the effects of market volatilities on Origin Agritech and Albemarle 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 Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Albemarle.
Diversification Opportunities for Origin Agritech and Albemarle
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and Albemarle is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle 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 Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Origin Agritech i.e., Origin Agritech and Albemarle go up and down completely randomly.
Pair Corralation between Origin Agritech and Albemarle
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.11 times more return on investment than Albemarle. However, Origin Agritech is 1.11 times more volatile than Albemarle. It trades about 0.13 of its potential returns per unit of risk. Albemarle is currently generating about 0.15 per unit of risk. If you would invest 238.00 in Origin Agritech on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Origin Agritech or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Agritech vs. Albemarle
Performance |
| Timeline |
| Origin Agritech |
| Albemarle |
Origin Agritech and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Albemarle
The main advantage of trading using opposite Origin Agritech and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
| Albemarle vs. Sumitomo Mitsui Construction | Albemarle vs. Xinhua Winshare Publishing | Albemarle vs. Australian Agricultural | Albemarle vs. HYDROFARM HLD GRP |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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