Correlation Between Align Technology and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Align Technology 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 Align Technology and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Origin Agritech, you can compare the effects of market volatilities on Align Technology 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 Align Technology with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Origin Agritech.
Diversification Opportunities for Align Technology and Origin Agritech
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Align and Origin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Align Technology 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 Align Technology 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 Align Technology i.e., Align Technology and Origin Agritech go up and down completely randomly.
Pair Corralation between Align Technology and Origin Agritech
Assuming the 90 days horizon Align Technology is expected to generate 0.48 times more return on investment than Origin Agritech. However, Align Technology is 2.07 times less risky than Origin Agritech. It trades about 0.19 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.04 per unit of risk. If you would invest 20,020 in Align Technology on August 29, 2024 and sell it today you would earn a total of 1,560 from holding Align Technology or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. Origin Agritech
Performance |
| Timeline |
| Align Technology |
| Origin Agritech |
Align Technology and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Origin Agritech
The main advantage of trading using opposite Align Technology and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology 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.| Align Technology vs. Superior Plus Corp | Align Technology vs. NMI Holdings | Align Technology vs. Origin Agritech | Align Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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