Correlation Between Origin Agritech and Nel ASA
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Nel ASA 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 Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Nel ASA, you can compare the effects of market volatilities on Origin Agritech and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Nel ASA.
Diversification Opportunities for Origin Agritech and Nel ASA
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and Nel is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Origin Agritech i.e., Origin Agritech and Nel ASA go up and down completely randomly.
Pair Corralation between Origin Agritech and Nel ASA
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.63 times more return on investment than Nel ASA. However, Origin Agritech is 1.63 times more volatile than Nel ASA. It trades about 0.05 of its potential returns per unit of risk. Nel ASA is currently generating about -0.06 per unit of risk. If you would invest 187.00 in Origin Agritech on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Origin Agritech or generate 25.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Origin Agritech vs. Nel ASA
Performance |
| Timeline |
| Origin Agritech |
| Nel ASA |
Origin Agritech and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Nel ASA
The main advantage of trading using opposite Origin Agritech and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| Origin Agritech vs. Playtech plc | Origin Agritech vs. AAC TECHNOLOGHLDGADR | Origin Agritech vs. SCANDMEDICAL SOLDK 040 | Origin Agritech vs. ONWARD MEDICAL BV |
| Nel ASA vs. Powercell Sweden | Nel ASA vs. ITM Power Plc | Nel ASA vs. Ballard Power Systems | Nel ASA vs. Plug Power |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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