Correlation Between Origin Agritech and HOYA
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and HOYA 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 HOYA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and HOYA Corporation, you can compare the effects of market volatilities on Origin Agritech and HOYA 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 HOYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and HOYA.
Diversification Opportunities for Origin Agritech and HOYA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and HOYA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and HOYA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA 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 HOYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA has no effect on the direction of Origin Agritech i.e., Origin Agritech and HOYA go up and down completely randomly.
Pair Corralation between Origin Agritech and HOYA
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the HOYA. In addition to that, Origin Agritech is 1.65 times more volatile than HOYA Corporation. It trades about -0.04 of its total potential returns per unit of risk. HOYA Corporation is currently generating about 0.01 per unit of volatility. If you would invest 12,085 in HOYA Corporation on August 27, 2024 and sell it today you would lose (30.00) from holding HOYA Corporation or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. HOYA Corp.
Performance |
| Timeline |
| Origin Agritech |
| HOYA |
Origin Agritech and HOYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and HOYA
The main advantage of trading using opposite Origin Agritech and HOYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, HOYA 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 HOYA will offset losses from the drop in HOYA's long position.| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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