Correlation Between Origin Agritech and PEPKOR
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and PEPKOR 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 PEPKOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and PEPKOR LTD, you can compare the effects of market volatilities on Origin Agritech and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and PEPKOR.
Diversification Opportunities for Origin Agritech and PEPKOR
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and PEPKOR is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of Origin Agritech i.e., Origin Agritech and PEPKOR go up and down completely randomly.
Pair Corralation between Origin Agritech and PEPKOR
Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.72 times less return on investment than PEPKOR. In addition to that, Origin Agritech is 1.02 times more volatile than PEPKOR LTD. It trades about 0.05 of its total potential returns per unit of risk. PEPKOR LTD is currently generating about 0.09 per unit of volatility. If you would invest 40.00 in PEPKOR LTD on September 4, 2024 and sell it today you would earn a total of 93.00 from holding PEPKOR LTD or generate 232.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Origin Agritech vs. PEPKOR LTD
Performance |
| Timeline |
| Origin Agritech |
| PEPKOR LTD |
Origin Agritech and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and PEPKOR
The main advantage of trading using opposite Origin Agritech and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
| PEPKOR vs. DiamondRock Hospitality | PEPKOR vs. Sabra Health Care | PEPKOR vs. HOCHSCHILD MINING | PEPKOR vs. TSOGO SUN GAMING |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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