Correlation Between Origin Agritech and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Fresenius Medical 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 Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Fresenius Medical Care, you can compare the effects of market volatilities on Origin Agritech and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Fresenius Medical.
Diversification Opportunities for Origin Agritech and Fresenius Medical
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Fresenius is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Origin Agritech i.e., Origin Agritech and Fresenius Medical go up and down completely randomly.
Pair Corralation between Origin Agritech and Fresenius Medical
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.01 times less return on investment than Fresenius Medical. In addition to that, Origin Agritech is 2.96 times more volatile than Fresenius Medical Care. It trades about 0.02 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.06 per unit of volatility. If you would invest 3,437 in Fresenius Medical Care on August 27, 2024 and sell it today you would earn a total of 788.00 from holding Fresenius Medical Care or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Fresenius Medical Care
Performance |
| Timeline |
| Origin Agritech |
| Fresenius Medical Care |
Origin Agritech and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Fresenius Medical
The main advantage of trading using opposite Origin Agritech and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Origin Agritech vs. ECHO INVESTMENT ZY | Origin Agritech vs. Penn National Gaming | Origin Agritech vs. HOCHSCHILD MINING | Origin Agritech vs. Strategic Investments AS |
| Fresenius Medical vs. Option Care Health | Fresenius Medical vs. HYGEIA HC HLDGS | Fresenius Medical vs. Superior Plus Corp | Fresenius Medical 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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