Correlation Between Origin Agritech and AECOM
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and AECOM 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 AECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and AECOM, you can compare the effects of market volatilities on Origin Agritech and AECOM 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 AECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and AECOM.
Diversification Opportunities for Origin Agritech and AECOM
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and AECOM is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and AECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM 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 AECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM has no effect on the direction of Origin Agritech i.e., Origin Agritech and AECOM go up and down completely randomly.
Pair Corralation between Origin Agritech and AECOM
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the AECOM. In addition to that, Origin Agritech is 2.07 times more volatile than AECOM. It trades about -0.06 of its total potential returns per unit of risk. AECOM is currently generating about 0.21 per unit of volatility. If you would invest 9,228 in AECOM on August 28, 2024 and sell it today you would earn a total of 1,872 from holding AECOM or generate 20.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. AECOM
Performance |
| Timeline |
| Origin Agritech |
| AECOM |
Origin Agritech and AECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and AECOM
The main advantage of trading using opposite Origin Agritech and AECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, AECOM 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 AECOM will offset losses from the drop in AECOM's 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 |
| AECOM vs. China Railway Construction | AECOM vs. Superior Plus Corp | AECOM vs. NMI Holdings | AECOM vs. Origin Agritech |
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.
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