Correlation Between Origin Agritech and LendingTree
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and LendingTree 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 LendingTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and LendingTree, you can compare the effects of market volatilities on Origin Agritech and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and LendingTree.
Diversification Opportunities for Origin Agritech and LendingTree
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and LendingTree is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of Origin Agritech i.e., Origin Agritech and LendingTree go up and down completely randomly.
Pair Corralation between Origin Agritech and LendingTree
Assuming the 90 days trading horizon Origin Agritech is expected to generate 0.85 times more return on investment than LendingTree. However, Origin Agritech is 1.18 times less risky than LendingTree. It trades about 0.13 of its potential returns per unit of risk. LendingTree is currently generating about -0.09 per unit of risk. If you would invest 238.00 in Origin Agritech on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Origin Agritech or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. LendingTree
Performance |
| Timeline |
| Origin Agritech |
| LendingTree |
Origin Agritech and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and LendingTree
The main advantage of trading using opposite Origin Agritech and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
| LendingTree vs. DATANG INTL POW | LendingTree vs. NTT DATA | LendingTree vs. Sumitomo Mitsui Construction | LendingTree vs. North American Construction |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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