Correlation Between Origin Agritech and FF Australia
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and FF Australia 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 Australia 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 Australia, you can compare the effects of market volatilities on Origin Agritech and FF Australia 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 Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and FF Australia.
Diversification Opportunities for Origin Agritech and FF Australia
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and FPGK is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and FF Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Australia 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 Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Australia has no effect on the direction of Origin Agritech i.e., Origin Agritech and FF Australia go up and down completely randomly.
Pair Corralation between Origin Agritech and FF Australia
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the FF Australia. In addition to that, Origin Agritech is 5.32 times more volatile than FF Australia. It trades about -0.01 of its total potential returns per unit of risk. FF Australia is currently generating about 0.07 per unit of volatility. If you would invest 5,137 in FF Australia on September 3, 2024 and sell it today you would earn a total of 830.00 from holding FF Australia or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 40.0% |
| Values | Daily Returns |
Origin Agritech vs. FF Australia
Performance |
| Timeline |
| Origin Agritech |
| FF Australia |
Origin Agritech and FF Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and FF Australia
The main advantage of trading using opposite Origin Agritech and FF Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, FF Australia 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 Australia will offset losses from the drop in FF Australia'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 |
| FF Australia vs. Groupama Entreprises N | FF Australia vs. Renaissance Europe C | FF Australia vs. Superior Plus Corp | FF Australia 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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