Correlation Between NEL ASA and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both NEL ASA 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 NEL ASA and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEL ASA ADR30 and Origin Agritech, you can compare the effects of market volatilities on NEL ASA 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 NEL ASA with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and Origin Agritech.
Diversification Opportunities for NEL ASA and Origin Agritech
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEL and Origin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and NEL ASA 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 NEL ASA ADR30 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 NEL ASA i.e., NEL ASA and Origin Agritech go up and down completely randomly.
Pair Corralation between NEL ASA and Origin Agritech
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the Origin Agritech. But the stock apears to be less risky and, when comparing its historical volatility, NEL ASA ADR30 is 1.05 times less risky than Origin Agritech. The stock trades about -0.03 of its potential returns per unit of risk. The Origin Agritech is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 985.00 in Origin Agritech on August 30, 2024 and sell it today you would lose (717.00) from holding Origin Agritech or give up 72.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. Origin Agritech
Performance |
| Timeline |
| NEL ASA ADR30 |
| Origin Agritech |
NEL ASA and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and Origin Agritech
The main advantage of trading using opposite NEL ASA and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA 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.| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. SIVERS SEMICONDUCTORS AB | NEL ASA vs. Talanx AG |
| Origin Agritech vs. OAKTRSPECLENDNEW | Origin Agritech vs. Jacquet Metal Service | Origin Agritech vs. MCEWEN MINING INC | Origin Agritech vs. URBAN OUTFITTERS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |