Correlation Between Japan Asia and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Origin Agritech, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Origin Agritech.
Diversification Opportunities for Japan Asia and Origin Agritech
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Japan and Origin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Origin Agritech go up and down completely randomly.
Pair Corralation between Japan Asia and Origin Agritech
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the Origin Agritech. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 1.86 times less risky than Origin Agritech. The stock trades about -0.02 of its potential returns per unit of risk. The Origin Agritech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Origin Agritech on November 3, 2024 and sell it today you would earn a total of 47.00 from holding Origin Agritech or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Origin Agritech
Performance |
| Timeline |
| Japan Asia Investment |
| Origin Agritech |
Japan Asia and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Origin Agritech
The main advantage of trading using opposite Japan Asia and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Geely Automobile Holdings | Japan Asia vs. betterU Education Corp | Japan Asia vs. Chengdu PUTIAN Telecommunications | Japan Asia vs. Adtalem Global Education |
| Origin Agritech vs. Sekisui Chemical Co | Origin Agritech vs. BOS BETTER ONLINE | Origin Agritech vs. Shin Etsu Chemical Co | Origin Agritech vs. YATRA ONLINE DL 0001 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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