Correlation Between KION Group and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both KION Group 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 KION Group and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KION Group AG and Origin Agritech, you can compare the effects of market volatilities on KION Group 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 KION Group with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KION Group and Origin Agritech.
Diversification Opportunities for KION Group and Origin Agritech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KION and Origin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KION Group AG and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and KION Group 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 KION Group AG 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 KION Group i.e., KION Group and Origin Agritech go up and down completely randomly.
Pair Corralation between KION Group and Origin Agritech
Assuming the 90 days horizon KION Group AG is expected to generate 0.73 times more return on investment than Origin Agritech. However, KION Group AG is 1.37 times less risky than Origin Agritech. It trades about -0.09 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.14 per unit of risk. If you would invest 3,515 in KION Group AG on August 25, 2024 and sell it today you would lose (217.00) from holding KION Group AG or give up 6.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KION Group AG vs. Origin Agritech
Performance |
| Timeline |
| KION Group AG |
| Origin Agritech |
KION Group and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KION Group and Origin Agritech
The main advantage of trading using opposite KION Group and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KION Group 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.| KION Group vs. Cogent Communications Holdings | KION Group vs. Diamyd Medical AB | KION Group vs. Japan Medical Dynamic | KION Group vs. Ribbon Communications |
| Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Energy Limited | Origin Agritech vs. Origin Enterprises plc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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