Correlation Between Origin Agritech and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Burlington Stores 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 Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Burlington Stores, you can compare the effects of market volatilities on Origin Agritech and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Burlington Stores.
Diversification Opportunities for Origin Agritech and Burlington Stores
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Burlington is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Origin Agritech i.e., Origin Agritech and Burlington Stores go up and down completely randomly.
Pair Corralation between Origin Agritech and Burlington Stores
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.14 times more return on investment than Burlington Stores. However, Origin Agritech is 3.14 times more volatile than Burlington Stores. It trades about 0.05 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.1 per unit of risk. If you would invest 171.00 in Origin Agritech on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Origin Agritech or generate 41.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Origin Agritech vs. Burlington Stores
Performance |
| Timeline |
| Origin Agritech |
| Burlington Stores |
Origin Agritech and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Burlington Stores
The main advantage of trading using opposite Origin Agritech and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
| Burlington Stores vs. WIMFARM SA EO | Burlington Stores vs. Nufarm Limited | Burlington Stores vs. Hanison Construction Holdings | Burlington Stores vs. HYDROFARM HLD GRP |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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