Correlation Between Origin Agritech and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Lundin Mining 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 Lundin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Lundin Mining, you can compare the effects of market volatilities on Origin Agritech and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Lundin Mining.
Diversification Opportunities for Origin Agritech and Lundin Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and Lundin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of Origin Agritech i.e., Origin Agritech and Lundin Mining go up and down completely randomly.
Pair Corralation between Origin Agritech and Lundin Mining
Assuming the 90 days trading horizon Origin Agritech is expected to generate 2.21 times more return on investment than Lundin Mining. However, Origin Agritech is 2.21 times more volatile than Lundin Mining. It trades about 0.1 of its potential returns per unit of risk. Lundin Mining is currently generating about 0.12 per unit of risk. If you would invest 232.00 in Origin Agritech on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Origin Agritech or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Lundin Mining
Performance |
| Timeline |
| Origin Agritech |
| Lundin Mining |
Origin Agritech and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Lundin Mining
The main advantage of trading using opposite Origin Agritech and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| Origin Agritech vs. NISSIN FOODS HLDGS | Origin Agritech vs. Ebro Foods SA | Origin Agritech vs. Tyson Foods | Origin Agritech vs. CAL MAINE FOODS |
| Lundin Mining vs. Superior Plus Corp | Lundin Mining vs. NMI Holdings | Lundin Mining vs. Origin Agritech | Lundin Mining 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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