Correlation Between Origin Agritech and AutoZone
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and AutoZone 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 AutoZone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and AutoZone, you can compare the effects of market volatilities on Origin Agritech and AutoZone 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 AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and AutoZone.
Diversification Opportunities for Origin Agritech and AutoZone
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and AutoZone is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone 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 AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of Origin Agritech i.e., Origin Agritech and AutoZone go up and down completely randomly.
Pair Corralation between Origin Agritech and AutoZone
Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.53 times more return on investment than AutoZone. However, Origin Agritech is 4.53 times more volatile than AutoZone. It trades about 0.01 of its potential returns per unit of risk. AutoZone is currently generating about 0.03 per unit of risk. If you would invest 290.00 in Origin Agritech on September 3, 2024 and sell it today you would lose (48.00) from holding Origin Agritech or give up 16.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. AutoZone
Performance |
| Timeline |
| Origin Agritech |
| AutoZone |
Origin Agritech and AutoZone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and AutoZone
The main advantage of trading using opposite Origin Agritech and AutoZone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, AutoZone 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 AutoZone will offset losses from the drop in AutoZone's long position.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
| AutoZone vs. NORTHEAST UTILITIES | AutoZone vs. GameStop Corp | AutoZone vs. HOCHSCHILD MINING | AutoZone vs. VARIOUS EATERIES LS |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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