Correlation Between Origin Agritech and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Addtech AB 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 Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Addtech AB, you can compare the effects of market volatilities on Origin Agritech and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Addtech AB.
Diversification Opportunities for Origin Agritech and Addtech AB
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and Addtech is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Origin Agritech i.e., Origin Agritech and Addtech AB go up and down completely randomly.
Pair Corralation between Origin Agritech and Addtech AB
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.48 times more return on investment than Addtech AB. However, Origin Agritech is 3.48 times more volatile than Addtech AB. It trades about 0.08 of its potential returns per unit of risk. Addtech AB is currently generating about 0.1 per unit of risk. If you would invest 196.00 in Origin Agritech on November 4, 2024 and sell it today you would earn a total of 14.00 from holding Origin Agritech or generate 7.14% 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. Addtech AB
Performance |
| Timeline |
| Origin Agritech |
| Addtech AB |
Origin Agritech and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Addtech AB
The main advantage of trading using opposite Origin Agritech and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Origin Agritech vs. Kingdee International Software | Origin Agritech vs. Take Two Interactive Software | Origin Agritech vs. Gol Intelligent Airlines | Origin Agritech vs. AEGEAN AIRLINES |
| Addtech AB vs. COVIVIO HOTELS INH | Addtech AB vs. Hyatt Hotels | Addtech AB vs. HYATT HOTELS A | Addtech AB vs. Meli Hotels International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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