Correlation Between Origin Agritech and Novavax
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Novavax 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 Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Novavax, you can compare the effects of market volatilities on Origin Agritech and Novavax 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 Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Novavax.
Diversification Opportunities for Origin Agritech and Novavax
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and Novavax is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax 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 Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Origin Agritech i.e., Origin Agritech and Novavax go up and down completely randomly.
Pair Corralation between Origin Agritech and Novavax
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Novavax. But the stock apears to be less risky and, when comparing its historical volatility, Origin Agritech is 1.26 times less risky than Novavax. The stock trades about -0.09 of its potential returns per unit of risk. The Novavax is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Novavax on August 25, 2024 and sell it today you would lose (578.00) from holding Novavax or give up 41.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Origin Agritech vs. Novavax
Performance |
| Timeline |
| Origin Agritech |
| Novavax |
Origin Agritech and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Novavax
The main advantage of trading using opposite Origin Agritech and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Novavax 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 Novavax will offset losses from the drop in Novavax's long position.| Origin Agritech vs. Mizuho Financial Group | Origin Agritech vs. Mitsui Chemicals | Origin Agritech vs. PT Bank Maybank | Origin Agritech vs. REVO INSURANCE SPA |
| Novavax vs. CSL Limited | Novavax vs. Superior Plus Corp | Novavax vs. NMI Holdings | Novavax 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |