Correlation Between Origin Agritech and AS Latvijas
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and AS Latvijas 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 AS Latvijas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and AS Latvijas balzams, you can compare the effects of market volatilities on Origin Agritech and AS Latvijas 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 AS Latvijas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and AS Latvijas.
Diversification Opportunities for Origin Agritech and AS Latvijas
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and UM9 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams 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 AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of Origin Agritech i.e., Origin Agritech and AS Latvijas go up and down completely randomly.
Pair Corralation between Origin Agritech and AS Latvijas
Assuming the 90 days trading horizon Origin Agritech is expected to generate 14.31 times more return on investment than AS Latvijas. However, Origin Agritech is 14.31 times more volatile than AS Latvijas balzams. It trades about 0.06 of its potential returns per unit of risk. AS Latvijas balzams is currently generating about 0.22 per unit of risk. If you would invest 232.00 in Origin Agritech on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Origin Agritech or generate 4.31% 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. AS Latvijas balzams
Performance |
| Timeline |
| Origin Agritech |
| AS Latvijas balzams |
Origin Agritech and AS Latvijas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and AS Latvijas
The main advantage of trading using opposite Origin Agritech and AS Latvijas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, AS Latvijas 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 AS Latvijas will offset losses from the drop in AS Latvijas' long position.| Origin Agritech vs. Gamma Communications plc | Origin Agritech vs. Chunghwa Telecom Co | Origin Agritech vs. Citic Telecom International | Origin Agritech vs. Ribbon Communications |
| AS Latvijas vs. Tsingtao Brewery | AS Latvijas vs. TRAINLINE PLC LS | AS Latvijas vs. Fukuyama Transporting Co | AS Latvijas vs. Liberty Broadband |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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