Correlation Between AIA Group and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both AIA Group and Origin Agritech 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 AIA Group and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIA Group Limited and Origin Agritech, you can compare the effects of market volatilities on AIA Group and Origin Agritech 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 AIA Group with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIA Group and Origin Agritech.
Diversification Opportunities for AIA Group and Origin Agritech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIA and Origin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding AIA Group Limited and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and AIA Group 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 AIA Group Limited are associated (or correlated) with Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of AIA Group i.e., AIA Group and Origin Agritech go up and down completely randomly.
Pair Corralation between AIA Group and Origin Agritech
Assuming the 90 days horizon AIA Group Limited is expected to under-perform the Origin Agritech. But the stock apears to be less risky and, when comparing its historical volatility, AIA Group Limited is 2.93 times less risky than Origin Agritech. The stock trades about -0.09 of its potential returns per unit of risk. The Origin Agritech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Origin Agritech on September 2, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIA Group Limited vs. Origin Agritech
Performance |
| Timeline |
| AIA Group Limited |
| Origin Agritech |
AIA Group and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIA Group and Origin Agritech
The main advantage of trading using opposite AIA Group and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIA Group position performs unexpectedly, Origin Agritech 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 Origin Agritech will offset losses from the drop in Origin Agritech's long position.The idea behind AIA Group Limited and Origin Agritech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Origin Agritech vs. CENTURIA OFFICE REIT | Origin Agritech vs. Ryanair Holdings plc | Origin Agritech vs. KENEDIX OFFICE INV | Origin Agritech vs. MAVEN WIRELESS SWEDEN |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |