Correlation Between Origin Agritech and ORIX
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and ORIX 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 ORIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and ORIX Corporation, you can compare the effects of market volatilities on Origin Agritech and ORIX 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 ORIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and ORIX.
Diversification Opportunities for Origin Agritech and ORIX
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and ORIX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ORIX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORIX 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 ORIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORIX has no effect on the direction of Origin Agritech i.e., Origin Agritech and ORIX go up and down completely randomly.
Pair Corralation between Origin Agritech and ORIX
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.55 times more return on investment than ORIX. However, Origin Agritech is 3.55 times more volatile than ORIX Corporation. It trades about 0.04 of its potential returns per unit of risk. ORIX Corporation is currently generating about 0.05 per unit of risk. If you would invest 206.00 in Origin Agritech on August 25, 2024 and sell it today you would earn a total of 26.00 from holding Origin Agritech or generate 12.62% 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. ORIX Corp.
Performance |
| Timeline |
| Origin Agritech |
| ORIX |
Origin Agritech and ORIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and ORIX
The main advantage of trading using opposite Origin Agritech and ORIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, ORIX 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 ORIX will offset losses from the drop in ORIX's long position.| Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Enterprises plc |
| ORIX vs. Superior Plus Corp | ORIX vs. NMI Holdings | ORIX vs. Origin Agritech | ORIX vs. SIVERS SEMICONDUCTORS AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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