Correlation Between CSL and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and Origin Agritech, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Origin Agritech.
Diversification Opportunities for CSL and Origin Agritech
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CSL and Origin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and CSL 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 CSL 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 CSL i.e., CSL and Origin Agritech go up and down completely randomly.
Pair Corralation between CSL and Origin Agritech
Assuming the 90 days horizon CSL Limited is expected to generate 0.22 times more return on investment than Origin Agritech. However, CSL Limited is 4.54 times less risky than Origin Agritech. It trades about 0.01 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.01 per unit of risk. If you would invest 17,140 in CSL Limited on August 28, 2024 and sell it today you would earn a total of 370.00 from holding CSL Limited or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CSL Limited vs. Origin Agritech
Performance |
| Timeline |
| CSL Limited |
| Origin Agritech |
CSL and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Origin Agritech
The main advantage of trading using opposite CSL and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.| CSL vs. Superior Plus Corp | CSL vs. NMI Holdings | CSL vs. Origin Agritech | CSL 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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