Correlation Between Origin Agritech and BHP Group
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and BHP Group 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 BHP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and BHP Group Limited, you can compare the effects of market volatilities on Origin Agritech and BHP Group 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and BHP Group.
Diversification Opportunities for Origin Agritech and BHP Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and BHP is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Origin Agritech i.e., Origin Agritech and BHP Group go up and down completely randomly.
Pair Corralation between Origin Agritech and BHP Group
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the BHP Group. In addition to that, Origin Agritech is 3.76 times more volatile than BHP Group Limited. It trades about -0.02 of its total potential returns per unit of risk. BHP Group Limited is currently generating about 0.01 per unit of volatility. If you would invest 2,485 in BHP Group Limited on August 25, 2024 and sell it today you would lose (35.00) from holding BHP Group Limited or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. BHP Group Limited
Performance |
| Timeline |
| Origin Agritech |
| BHP Group Limited |
Origin Agritech and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and BHP Group
The main advantage of trading using opposite Origin Agritech and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, BHP Group 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 BHP Group will offset losses from the drop in BHP Group's long position.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| BHP Group vs. BOS BETTER ONLINE | BHP Group vs. Southwest Airlines Co | BHP Group vs. Tsingtao Brewery | BHP Group vs. American Airlines Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |