Correlation Between ON THE and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both ON THE 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 ON THE and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON THE BEACH and Origin Agritech, you can compare the effects of market volatilities on ON THE 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 ON THE with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON THE and Origin Agritech.
Diversification Opportunities for ON THE and Origin Agritech
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between 9BP and Origin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ON THE BEACH and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and ON THE 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 ON THE BEACH 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 ON THE i.e., ON THE and Origin Agritech go up and down completely randomly.
Pair Corralation between ON THE and Origin Agritech
Assuming the 90 days horizon ON THE BEACH is expected to generate 0.51 times more return on investment than Origin Agritech. However, ON THE BEACH is 1.96 times less risky than Origin Agritech. It trades about 0.02 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.01 per unit of risk. If you would invest 184.00 in ON THE BEACH on August 28, 2024 and sell it today you would earn a total of 9.00 from holding ON THE BEACH or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
ON THE BEACH vs. Origin Agritech
Performance |
| Timeline |
| ON THE BEACH |
| Origin Agritech |
ON THE and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON THE and Origin Agritech
The main advantage of trading using opposite ON THE and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON THE 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.| ON THE vs. Superior Plus Corp | ON THE vs. NMI Holdings | ON THE vs. Origin Agritech | ON THE vs. SIVERS SEMICONDUCTORS AB |
| Origin Agritech vs. 24SEVENOFFICE GROUP AB | Origin Agritech vs. MAVEN WIRELESS SWEDEN | Origin Agritech vs. SIDETRADE EO 1 | Origin Agritech vs. HK Electric 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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