Correlation Between Origin Agritech and China Resources
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and China Resources Beer, you can compare the effects of market volatilities on Origin Agritech and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and China Resources.
Diversification Opportunities for Origin Agritech and China Resources
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and China is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Origin Agritech i.e., Origin Agritech and China Resources go up and down completely randomly.
Pair Corralation between Origin Agritech and China Resources
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the China Resources. In addition to that, Origin Agritech is 2.04 times more volatile than China Resources Beer. It trades about -0.08 of its total potential returns per unit of risk. China Resources Beer is currently generating about 0.16 per unit of volatility. If you would invest 282.00 in China Resources Beer on November 29, 2024 and sell it today you would earn a total of 24.00 from holding China Resources Beer or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. China Resources Beer
Performance |
| Timeline |
| Origin Agritech |
| China Resources Beer |
Origin Agritech and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and China Resources
The main advantage of trading using opposite Origin Agritech and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Origin Agritech vs. X FAB Silicon Foundries | Origin Agritech vs. AEON METALS LTD | Origin Agritech vs. Siamgas And Petrochemicals | Origin Agritech vs. Sportsmans Warehouse Holdings |
| China Resources vs. Air Transport Services | China Resources vs. KAUFMAN ET BROAD | China Resources vs. COLUMBIA SPORTSWEAR | China Resources vs. Transportadora de Gas |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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