Correlation Between Origin Agritech and Halma Plc
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Halma Plc 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 Halma Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Halma plc, you can compare the effects of market volatilities on Origin Agritech and Halma Plc 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 Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Halma Plc.
Diversification Opportunities for Origin Agritech and Halma Plc
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Halma is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Halma plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halma plc 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 Halma Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halma plc has no effect on the direction of Origin Agritech i.e., Origin Agritech and Halma Plc go up and down completely randomly.
Pair Corralation between Origin Agritech and Halma Plc
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Halma Plc. In addition to that, Origin Agritech is 3.21 times more volatile than Halma plc. It trades about -0.02 of its total potential returns per unit of risk. Halma plc is currently generating about 0.04 per unit of volatility. If you would invest 2,561 in Halma plc on October 29, 2024 and sell it today you would earn a total of 939.00 from holding Halma plc or generate 36.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Origin Agritech vs. Halma plc
Performance |
| Timeline |
| Origin Agritech |
| Halma plc |
Origin Agritech and Halma Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Halma Plc
The main advantage of trading using opposite Origin Agritech and Halma Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Halma Plc 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 Halma Plc will offset losses from the drop in Halma Plc's long position.| Origin Agritech vs. De Grey Mining | Origin Agritech vs. MAGNUM MINING EXP | Origin Agritech vs. DAIRY FARM INTL | Origin Agritech vs. GRIFFIN MINING LTD |
| Halma Plc vs. Burlington Stores | Halma Plc vs. DFS Furniture PLC | Halma Plc vs. COSTCO WHOLESALE CDR | Halma Plc vs. ADDUS HOMECARE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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