Correlation Between Origin Agritech and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Bechtle AG 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 Bechtle AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Bechtle AG, you can compare the effects of market volatilities on Origin Agritech and Bechtle AG 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 Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Bechtle AG.
Diversification Opportunities for Origin Agritech and Bechtle AG
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and Bechtle is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG 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 Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of Origin Agritech i.e., Origin Agritech and Bechtle AG go up and down completely randomly.
Pair Corralation between Origin Agritech and Bechtle AG
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Bechtle AG. In addition to that, Origin Agritech is 3.55 times more volatile than Bechtle AG. It trades about -0.01 of its total potential returns per unit of risk. Bechtle AG is currently generating about -0.01 per unit of volatility. If you would invest 3,827 in Bechtle AG on December 1, 2024 and sell it today you would lose (539.00) from holding Bechtle AG or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Bechtle AG
Performance |
| Timeline |
| Origin Agritech |
| Bechtle AG |
Origin Agritech and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Bechtle AG
The main advantage of trading using opposite Origin Agritech and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| Origin Agritech vs. ROYAL ROAD MIN | Origin Agritech vs. BJs Restaurants | Origin Agritech vs. BII Railway Transportation | Origin Agritech vs. Transport International Holdings |
| Bechtle AG vs. Gaming and Leisure | Bechtle AG vs. ANTA Sports Products | Bechtle AG vs. GUILD ESPORTS PLC | Bechtle AG vs. InPlay Oil Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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