Correlation Between Origin Agritech and ZIJIN MINH
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and ZIJIN MINH 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 ZIJIN MINH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on Origin Agritech and ZIJIN MINH 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 ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and ZIJIN MINH.
Diversification Opportunities for Origin Agritech and ZIJIN MINH
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and ZIJIN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 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 ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of Origin Agritech i.e., Origin Agritech and ZIJIN MINH go up and down completely randomly.
Pair Corralation between Origin Agritech and ZIJIN MINH
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the ZIJIN MINH. In addition to that, Origin Agritech is 2.25 times more volatile than ZIJIN MINH UNSPADR20. It trades about -0.01 of its total potential returns per unit of risk. ZIJIN MINH UNSPADR20 is currently generating about 0.05 per unit of volatility. If you would invest 2,364 in ZIJIN MINH UNSPADR20 on September 4, 2024 and sell it today you would earn a total of 1,596 from holding ZIJIN MINH UNSPADR20 or generate 67.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Origin Agritech vs. ZIJIN MINH UNSPADR20
Performance |
| Timeline |
| Origin Agritech |
| ZIJIN MINH UNSPADR20 |
Origin Agritech and ZIJIN MINH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and ZIJIN MINH
The main advantage of trading using opposite Origin Agritech and ZIJIN MINH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, ZIJIN MINH 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 ZIJIN MINH will offset losses from the drop in ZIJIN MINH'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 |
| ZIJIN MINH vs. Barrick Gold | ZIJIN MINH vs. Superior Plus Corp | ZIJIN MINH vs. NMI Holdings | ZIJIN MINH 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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