Correlation Between BEIJJINGNENG CLERGHYC1 and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEIJJINGNENG CLERGHYC1 and Origin Agritech, you can compare the effects of market volatilities on BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEIJJINGNENG CLERGHYC1 and Origin Agritech.
Diversification Opportunities for BEIJJINGNENG CLERGHYC1 and Origin Agritech
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEIJJINGNENG and Origin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BEIJJINGNENG CLERGHYC1 and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 i.e., BEIJJINGNENG CLERGHYC1 and Origin Agritech go up and down completely randomly.
Pair Corralation between BEIJJINGNENG CLERGHYC1 and Origin Agritech
Assuming the 90 days horizon BEIJJINGNENG CLERGHYC1 is expected to generate 1.37 times more return on investment than Origin Agritech. However, BEIJJINGNENG CLERGHYC1 is 1.37 times more volatile than Origin Agritech. It trades about 0.06 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.04 per unit of risk. If you would invest 22.00 in BEIJJINGNENG CLERGHYC1 on August 27, 2024 and sell it today you would earn a total of 1.00 from holding BEIJJINGNENG CLERGHYC1 or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEIJJINGNENG CLERGHYC1 vs. Origin Agritech
Performance |
| Timeline |
| BEIJJINGNENG CLERGHYC1 |
| Origin Agritech |
BEIJJINGNENG CLERGHYC1 and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEIJJINGNENG CLERGHYC1 and Origin Agritech
The main advantage of trading using opposite BEIJJINGNENG CLERGHYC1 and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEIJJINGNENG CLERGHYC1 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.| BEIJJINGNENG CLERGHYC1 vs. VERBUND AG ADR | BEIJJINGNENG CLERGHYC1 vs. Superior Plus Corp | BEIJJINGNENG CLERGHYC1 vs. Origin Agritech | BEIJJINGNENG CLERGHYC1 vs. Identiv |
| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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