Correlation Between Origin Agritech and KOMATSU
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and KOMATSU 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 KOMATSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and KOMATSU LTD SPONS, you can compare the effects of market volatilities on Origin Agritech and KOMATSU 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 KOMATSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and KOMATSU.
Diversification Opportunities for Origin Agritech and KOMATSU
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and KOMATSU is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and KOMATSU LTD SPONS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOMATSU LTD SPONS 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 KOMATSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOMATSU LTD SPONS has no effect on the direction of Origin Agritech i.e., Origin Agritech and KOMATSU go up and down completely randomly.
Pair Corralation between Origin Agritech and KOMATSU
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the KOMATSU. In addition to that, Origin Agritech is 3.29 times more volatile than KOMATSU LTD SPONS. It trades about -0.01 of its total potential returns per unit of risk. KOMATSU LTD SPONS is currently generating about 0.04 per unit of volatility. If you would invest 1,847 in KOMATSU LTD SPONS on August 31, 2024 and sell it today you would earn a total of 653.00 from holding KOMATSU LTD SPONS or generate 35.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Origin Agritech vs. KOMATSU LTD SPONS
Performance |
| Timeline |
| Origin Agritech |
| KOMATSU LTD SPONS |
Origin Agritech and KOMATSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and KOMATSU
The main advantage of trading using opposite Origin Agritech and KOMATSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, KOMATSU 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 KOMATSU will offset losses from the drop in KOMATSU's long position.| Origin Agritech vs. FORMPIPE SOFTWARE AB | Origin Agritech vs. PTT Global Chemical | Origin Agritech vs. Magic Software Enterprises | Origin Agritech vs. UPDATE SOFTWARE |
| KOMATSU vs. Deere Company | KOMATSU vs. AB Volvo | KOMATSU vs. Daimler Truck Holding | KOMATSU vs. Metso Outotec Oyj |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |