Correlation Between Origin Agritech and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Canadian Utilities Limited, you can compare the effects of market volatilities on Origin Agritech and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Canadian Utilities.
Diversification Opportunities for Origin Agritech and Canadian Utilities
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and Canadian is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Origin Agritech i.e., Origin Agritech and Canadian Utilities go up and down completely randomly.
Pair Corralation between Origin Agritech and Canadian Utilities
Assuming the 90 days trading horizon Origin Agritech is expected to generate 5.31 times more return on investment than Canadian Utilities. However, Origin Agritech is 5.31 times more volatile than Canadian Utilities Limited. It trades about 0.01 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.04 per unit of risk. If you would invest 372.00 in Origin Agritech on August 28, 2024 and sell it today you would lose (138.00) from holding Origin Agritech or give up 37.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Canadian Utilities Limited
Performance |
| Timeline |
| Origin Agritech |
| Canadian Utilities |
Origin Agritech and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Canadian Utilities
The main advantage of trading using opposite Origin Agritech and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| Canadian Utilities vs. CONAGRA FOODS | Canadian Utilities vs. PT Indofood Sukses | Canadian Utilities vs. Performance Food Group | Canadian Utilities vs. THRACE PLASTICS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |