Correlation Between Origin Agritech and Air Products
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Air Products and, you can compare the effects of market volatilities on Origin Agritech and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Air Products.
Diversification Opportunities for Origin Agritech and Air Products
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and Air is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Origin Agritech i.e., Origin Agritech and Air Products go up and down completely randomly.
Pair Corralation between Origin Agritech and Air Products
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Air Products. In addition to that, Origin Agritech is 2.7 times more volatile than Air Products and. It trades about -0.07 of its total potential returns per unit of risk. Air Products and is currently generating about 0.13 per unit of volatility. If you would invest 23,533 in Air Products and on August 28, 2024 and sell it today you would earn a total of 8,137 from holding Air Products and or generate 34.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Air Products and
Performance |
| Timeline |
| Origin Agritech |
| Air Products |
Origin Agritech and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Air Products
The main advantage of trading using opposite Origin Agritech and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| Air Products vs. Major Drilling Group | Air Products vs. CECO ENVIRONMENTAL | Air Products vs. Perma Fix Environmental Services | Air Products vs. CosmoSteel Holdings Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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