Correlation Between Origin Agritech and First Quantum
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and First Quantum 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 First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and First Quantum Minerals, you can compare the effects of market volatilities on Origin Agritech and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and First Quantum.
Diversification Opportunities for Origin Agritech and First Quantum
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and First is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Origin Agritech i.e., Origin Agritech and First Quantum go up and down completely randomly.
Pair Corralation between Origin Agritech and First Quantum
Assuming the 90 days trading horizon Origin Agritech is expected to generate 8.11 times less return on investment than First Quantum. In addition to that, Origin Agritech is 1.89 times more volatile than First Quantum Minerals. It trades about 0.01 of its total potential returns per unit of risk. First Quantum Minerals is currently generating about 0.08 per unit of volatility. If you would invest 1,310 in First Quantum Minerals on September 13, 2024 and sell it today you would earn a total of 49.00 from holding First Quantum Minerals or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. First Quantum Minerals
Performance |
| Timeline |
| Origin Agritech |
| First Quantum Minerals |
Origin Agritech and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and First Quantum
The main advantage of trading using opposite Origin Agritech and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| Origin Agritech vs. MHP Hotel AG | Origin Agritech vs. G8 EDUCATION | Origin Agritech vs. STRAYER EDUCATION | Origin Agritech vs. DEVRY EDUCATION GRP |
| First Quantum vs. USWE SPORTS AB | First Quantum vs. TRAVEL LEISURE DL 01 | First Quantum vs. Corporate Office Properties | First Quantum vs. Columbia Sportswear |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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