Correlation Between Origin Agritech and China Mobile
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and China Mobile 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 Mobile 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 Life Insurance, you can compare the effects of market volatilities on Origin Agritech and China Mobile 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 Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and China Mobile.
Diversification Opportunities for Origin Agritech and China Mobile
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Origin Agritech i.e., Origin Agritech and China Mobile go up and down completely randomly.
Pair Corralation between Origin Agritech and China Mobile
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.18 times more return on investment than China Mobile. However, Origin Agritech is 1.18 times more volatile than China Life Insurance. It trades about 0.06 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.06 per unit of risk. If you would invest 232.00 in Origin Agritech on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Origin Agritech or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Origin Agritech vs. China Life Insurance
Performance |
| Timeline |
| Origin Agritech |
| China Life Insurance |
Origin Agritech and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and China Mobile
The main advantage of trading using opposite Origin Agritech and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, China Mobile 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 Mobile will offset losses from the drop in China Mobile's 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 |
| China Mobile vs. PARKEN Sport Entertainment | China Mobile vs. SEI INVESTMENTS | China Mobile vs. FIREWEED METALS P | China Mobile vs. Jacquet Metal Service |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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