Correlation Between Origin Agritech and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Playa Hotels 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 Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Playa Hotels Resorts, you can compare the effects of market volatilities on Origin Agritech and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Playa Hotels.
Diversification Opportunities for Origin Agritech and Playa Hotels
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Playa is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Origin Agritech i.e., Origin Agritech and Playa Hotels go up and down completely randomly.
Pair Corralation between Origin Agritech and Playa Hotels
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Playa Hotels. In addition to that, Origin Agritech is 1.2 times more volatile than Playa Hotels Resorts. It trades about -0.04 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.22 per unit of volatility. If you would invest 805.00 in Playa Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Playa Hotels Resorts or generate 14.91% 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. Playa Hotels Resorts
Performance |
| Timeline |
| Origin Agritech |
| Playa Hotels Resorts |
Origin Agritech and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Playa Hotels
The main advantage of trading using opposite Origin Agritech and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |