Correlation Between Origin Agritech and Longfor Group
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Longfor Group 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 Longfor Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Longfor Group Holdings, you can compare the effects of market volatilities on Origin Agritech and Longfor Group 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 Longfor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Longfor Group.
Diversification Opportunities for Origin Agritech and Longfor Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and Longfor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Longfor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Group Holdings 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 Longfor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Group Holdings has no effect on the direction of Origin Agritech i.e., Origin Agritech and Longfor Group go up and down completely randomly.
Pair Corralation between Origin Agritech and Longfor Group
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Longfor Group. But the stock apears to be less risky and, when comparing its historical volatility, Origin Agritech is 1.04 times less risky than Longfor Group. The stock trades about -0.16 of its potential returns per unit of risk. The Longfor Group Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 143.00 in Longfor Group Holdings on August 25, 2024 and sell it today you would lose (10.00) from holding Longfor Group Holdings or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Longfor Group Holdings
Performance |
| Timeline |
| Origin Agritech |
| Longfor Group Holdings |
Origin Agritech and Longfor Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Longfor Group
The main advantage of trading using opposite Origin Agritech and Longfor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Longfor Group 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 Longfor Group will offset losses from the drop in Longfor Group'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 |
| Longfor Group vs. G8 EDUCATION | Longfor Group vs. Hyrican Informationssysteme Aktiengesellschaft | Longfor Group vs. Science Applications International | Longfor Group vs. Datadog |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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