Correlation Between Origin Agritech and BGF Global
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and BGF Global 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 BGF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and BGF Global Allocation, you can compare the effects of market volatilities on Origin Agritech and BGF Global 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 BGF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and BGF Global.
Diversification Opportunities for Origin Agritech and BGF Global
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and BGF is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and BGF Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Global Allocation 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 BGF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Global Allocation has no effect on the direction of Origin Agritech i.e., Origin Agritech and BGF Global go up and down completely randomly.
Pair Corralation between Origin Agritech and BGF Global
Assuming the 90 days trading horizon Origin Agritech is expected to generate 5.56 times more return on investment than BGF Global. However, Origin Agritech is 5.56 times more volatile than BGF Global Allocation. It trades about 0.06 of its potential returns per unit of risk. BGF Global Allocation is currently generating about 0.27 per unit of risk. If you would invest 232.00 in Origin Agritech on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Origin Agritech or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. BGF Global Allocation
Performance |
| Timeline |
| Origin Agritech |
| BGF Global Allocation |
Origin Agritech and BGF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and BGF Global
The main advantage of trading using opposite Origin Agritech and BGF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, BGF Global 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 BGF Global will offset losses from the drop in BGF Global's long position.| Origin Agritech vs. CENTURIA OFFICE REIT | Origin Agritech vs. Ryanair Holdings plc | Origin Agritech vs. KENEDIX OFFICE INV | Origin Agritech vs. MAVEN WIRELESS SWEDEN |
| BGF Global vs. Groupama Entreprises N | BGF Global vs. Renaissance Europe C | BGF Global vs. Superior Plus Corp | BGF Global vs. Origin Agritech |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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