Correlation Between Origin Agritech and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and WILLIS LEASE 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 WILLIS LEASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and WILLIS LEASE FIN, you can compare the effects of market volatilities on Origin Agritech and WILLIS LEASE 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 WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and WILLIS LEASE.
Diversification Opportunities for Origin Agritech and WILLIS LEASE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and WILLIS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and WILLIS LEASE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIS LEASE FIN 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 WILLIS LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIS LEASE FIN has no effect on the direction of Origin Agritech i.e., Origin Agritech and WILLIS LEASE go up and down completely randomly.
Pair Corralation between Origin Agritech and WILLIS LEASE
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the WILLIS LEASE. But the stock apears to be less risky and, when comparing its historical volatility, Origin Agritech is 1.49 times less risky than WILLIS LEASE. The stock trades about -0.04 of its potential returns per unit of risk. The WILLIS LEASE FIN is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,980 in WILLIS LEASE FIN on August 27, 2024 and sell it today you would earn a total of 1,620 from holding WILLIS LEASE FIN or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. WILLIS LEASE FIN
Performance |
| Timeline |
| Origin Agritech |
| WILLIS LEASE FIN |
Origin Agritech and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and WILLIS LEASE
The main advantage of trading using opposite Origin Agritech and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, WILLIS LEASE 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 WILLIS LEASE will offset losses from the drop in WILLIS LEASE's long position.| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
| WILLIS LEASE vs. HANOVER INSURANCE | WILLIS LEASE vs. Ping An Insurance | WILLIS LEASE vs. THAI BEVERAGE | WILLIS LEASE vs. Tower One Wireless |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |