Correlation Between Origin Agritech and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and FUYO GENERAL 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 FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and FUYO GENERAL LEASE, you can compare the effects of market volatilities on Origin Agritech and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and FUYO GENERAL.
Diversification Opportunities for Origin Agritech and FUYO GENERAL
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and FUYO is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of Origin Agritech i.e., Origin Agritech and FUYO GENERAL go up and down completely randomly.
Pair Corralation between Origin Agritech and FUYO GENERAL
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the FUYO GENERAL. In addition to that, Origin Agritech is 2.89 times more volatile than FUYO GENERAL LEASE. It trades about -0.04 of its total potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.19 per unit of volatility. If you would invest 6,400 in FUYO GENERAL LEASE on August 27, 2024 and sell it today you would earn a total of 350.00 from holding FUYO GENERAL LEASE or generate 5.47% 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. FUYO GENERAL LEASE
Performance |
| Timeline |
| Origin Agritech |
| FUYO GENERAL LEASE |
Origin Agritech and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and FUYO GENERAL
The main advantage of trading using opposite Origin Agritech and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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