Correlation Between Origin Agritech and Eisai Co
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Eisai Co 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 Eisai Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Eisai Co, you can compare the effects of market volatilities on Origin Agritech and Eisai Co 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 Eisai Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Eisai Co.
Diversification Opportunities for Origin Agritech and Eisai Co
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and Eisai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Eisai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eisai Co 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 Eisai Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eisai Co has no effect on the direction of Origin Agritech i.e., Origin Agritech and Eisai Co go up and down completely randomly.
Pair Corralation between Origin Agritech and Eisai Co
Assuming the 90 days trading horizon Origin Agritech is expected to generate 14.58 times less return on investment than Eisai Co. In addition to that, Origin Agritech is 2.59 times more volatile than Eisai Co. It trades about 0.0 of its total potential returns per unit of risk. Eisai Co is currently generating about 0.09 per unit of volatility. If you would invest 2,578 in Eisai Co on November 30, 2024 and sell it today you would earn a total of 220.00 from holding Eisai Co or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Eisai Co
Performance |
| Timeline |
| Origin Agritech |
| Eisai Co |
Origin Agritech and Eisai Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Eisai Co
The main advantage of trading using opposite Origin Agritech and Eisai Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Eisai Co 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 Eisai Co will offset losses from the drop in Eisai Co's long position.| Origin Agritech vs. ROYAL ROAD MIN | Origin Agritech vs. BJs Restaurants | Origin Agritech vs. BII Railway Transportation | Origin Agritech vs. Transport International Holdings |
| Eisai Co vs. COREBRIDGE FINANCIAL INC | Eisai Co vs. Chiba Bank | Eisai Co vs. Federal Agricultural Mortgage | Eisai Co vs. CREDIT AGRICOLE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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