Correlation Between Origin Agritech and Orange SA
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Orange SA 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 Orange SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Orange SA, you can compare the effects of market volatilities on Origin Agritech and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Orange SA.
Diversification Opportunities for Origin Agritech and Orange SA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Orange is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Orange SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA has no effect on the direction of Origin Agritech i.e., Origin Agritech and Orange SA go up and down completely randomly.
Pair Corralation between Origin Agritech and Orange SA
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Orange SA. In addition to that, Origin Agritech is 5.11 times more volatile than Orange SA. It trades about -0.07 of its total potential returns per unit of risk. Orange SA is currently generating about -0.04 per unit of volatility. If you would invest 1,071 in Orange SA on September 3, 2024 and sell it today you would lose (65.00) from holding Orange SA or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Orange SA
Performance |
| Timeline |
| Origin Agritech |
| Orange SA |
Origin Agritech and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Orange SA
The main advantage of trading using opposite Origin Agritech and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA'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 |
| Orange SA vs. MUTUIONLINE | Orange SA vs. BOS BETTER ONLINE | Orange SA vs. SEKISUI CHEMICAL | Orange SA vs. WESTLAKE CHEMICAL |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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