Correlation Between Allianz SE and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Allianz SE 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 Allianz SE and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz SE and Origin Agritech, you can compare the effects of market volatilities on Allianz SE 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 Allianz SE with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and Origin Agritech.
Diversification Opportunities for Allianz SE and Origin Agritech
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and Origin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Allianz SE 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 Allianz SE 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 Allianz SE i.e., Allianz SE and Origin Agritech go up and down completely randomly.
Pair Corralation between Allianz SE and Origin Agritech
Assuming the 90 days horizon Allianz SE is expected to generate 0.14 times more return on investment than Origin Agritech. However, Allianz SE is 7.36 times less risky than Origin Agritech. It trades about 0.12 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.0 per unit of risk. If you would invest 19,823 in Allianz SE on September 4, 2024 and sell it today you would earn a total of 9,747 from holding Allianz SE or generate 49.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Allianz SE vs. Origin Agritech
Performance |
| Timeline |
| Allianz SE |
| Origin Agritech |
Allianz SE and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz SE and Origin Agritech
The main advantage of trading using opposite Allianz SE and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE 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.| Allianz SE vs. ELMOS SEMICONDUCTOR | Allianz SE vs. UET United Electronic | Allianz SE vs. ELECTRONIC ARTS | Allianz SE vs. STORE ELECTRONIC |
| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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