Correlation Between Origin Agritech and FF Global
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and FF Global 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 FF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and FF Global, you can compare the effects of market volatilities on Origin Agritech and FF Global 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 FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and FF Global.
Diversification Opportunities for Origin Agritech and FF Global
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and FJ2P is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global 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 FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of Origin Agritech i.e., Origin Agritech and FF Global go up and down completely randomly.
Pair Corralation between Origin Agritech and FF Global
Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.89 times more return on investment than FF Global. However, Origin Agritech is 4.89 times more volatile than FF Global. It trades about 0.06 of its potential returns per unit of risk. FF Global is currently generating about 0.27 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Origin Agritech vs. FF Global
Performance |
| Timeline |
| Origin Agritech |
| FF Global |
Origin Agritech and FF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and FF Global
The main advantage of trading using opposite Origin Agritech and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, FF Global 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 FF Global will offset losses from the drop in FF Global'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 |
| FF Global vs. Groupama Entreprises N | FF Global vs. Renaissance Europe C | FF Global vs. Superior Plus Corp | FF Global 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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