Correlation Between Origin Agritech and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and TotalEnergies SE, you can compare the effects of market volatilities on Origin Agritech and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and TotalEnergies.
Diversification Opportunities for Origin Agritech and TotalEnergies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Origin and TotalEnergies is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Origin Agritech i.e., Origin Agritech and TotalEnergies go up and down completely randomly.
Pair Corralation between Origin Agritech and TotalEnergies
Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.46 times more return on investment than TotalEnergies. However, Origin Agritech is 3.46 times more volatile than TotalEnergies SE. It trades about 0.13 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.31 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 | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Agritech vs. TotalEnergies SE
Performance |
| Timeline |
| Origin Agritech |
| TotalEnergies SE |
Origin Agritech and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and TotalEnergies
The main advantage of trading using opposite Origin Agritech and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
| TotalEnergies vs. Astral Foods Limited | TotalEnergies vs. CAL MAINE FOODS | TotalEnergies vs. LIFEWAY FOODS | TotalEnergies vs. WisdomTree Investments |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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