Correlation Between Origin Agritech and Fortinet
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Fortinet 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 Fortinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Fortinet, you can compare the effects of market volatilities on Origin Agritech and Fortinet 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 Fortinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Fortinet.
Diversification Opportunities for Origin Agritech and Fortinet
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Fortinet is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet 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 Fortinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortinet has no effect on the direction of Origin Agritech i.e., Origin Agritech and Fortinet go up and down completely randomly.
Pair Corralation between Origin Agritech and Fortinet
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Fortinet. In addition to that, Origin Agritech is 1.86 times more volatile than Fortinet. It trades about -0.07 of its total potential returns per unit of risk. Fortinet is currently generating about 0.15 per unit of volatility. If you would invest 5,502 in Fortinet on September 3, 2024 and sell it today you would earn a total of 3,532 from holding Fortinet or generate 64.19% 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. Fortinet
Performance |
| Timeline |
| Origin Agritech |
| Fortinet |
Origin Agritech and Fortinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Fortinet
The main advantage of trading using opposite Origin Agritech and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Fortinet 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 Fortinet will offset losses from the drop in Fortinet's long position.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
| Fortinet vs. Superior Plus Corp | Fortinet vs. NMI Holdings | Fortinet vs. Origin Agritech | Fortinet vs. SIVERS SEMICONDUCTORS AB |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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