Correlation Between Origin Agritech and KION Group
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and KION Group 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 KION Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and KION Group AG, you can compare the effects of market volatilities on Origin Agritech and KION Group 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and KION Group.
Diversification Opportunities for Origin Agritech and KION Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and KION is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of Origin Agritech i.e., Origin Agritech and KION Group go up and down completely randomly.
Pair Corralation between Origin Agritech and KION Group
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the KION Group. In addition to that, Origin Agritech is 1.72 times more volatile than KION Group AG. It trades about -0.02 of its total potential returns per unit of risk. KION Group AG is currently generating about -0.02 per unit of volatility. If you would invest 3,459 in KION Group AG on August 28, 2024 and sell it today you would lose (159.00) from holding KION Group AG or give up 4.6% 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. KION Group AG
Performance |
| Timeline |
| Origin Agritech |
| KION Group AG |
Origin Agritech and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and KION Group
The main advantage of trading using opposite Origin Agritech and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, KION Group 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 KION Group will offset losses from the drop in KION Group's long position.| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric Investments |
| KION Group vs. EAST SIDE GAMES | KION Group vs. Townsquare Media | KION Group vs. Hollywood Bowl Group | KION Group vs. Ubisoft Entertainment SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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