Correlation Between Origin Agritech and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and LOANDEPOT INC 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 LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and LOANDEPOT INC A, you can compare the effects of market volatilities on Origin Agritech and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and LOANDEPOT INC.
Diversification Opportunities for Origin Agritech and LOANDEPOT INC
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and LOANDEPOT is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Origin Agritech i.e., Origin Agritech and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Origin Agritech and LOANDEPOT INC
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.29 times less return on investment than LOANDEPOT INC. But when comparing it to its historical volatility, Origin Agritech is 1.14 times less risky than LOANDEPOT INC. It trades about 0.13 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 180.00 in LOANDEPOT INC A on August 30, 2024 and sell it today you would earn a total of 30.00 from holding LOANDEPOT INC A or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. LOANDEPOT INC A
Performance |
| Timeline |
| Origin Agritech |
| LOANDEPOT INC A |
Origin Agritech and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and LOANDEPOT INC
The main advantage of trading using opposite Origin Agritech and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
| LOANDEPOT INC vs. AUSTEVOLL SEAFOOD | LOANDEPOT INC vs. Algonquin Power Utilities | LOANDEPOT INC vs. Tyson Foods | LOANDEPOT INC vs. Charoen Pokphand Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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