Correlation Between Kaiser Aluminum and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum 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 Kaiser Aluminum and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Origin Agritech, you can compare the effects of market volatilities on Kaiser Aluminum 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 Kaiser Aluminum with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Origin Agritech.
Diversification Opportunities for Kaiser Aluminum and Origin Agritech
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kaiser and Origin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum i.e., Kaiser Aluminum and Origin Agritech go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Origin Agritech
Assuming the 90 days trading horizon Kaiser Aluminum is expected to generate 2.17 times less return on investment than Origin Agritech. But when comparing it to its historical volatility, Kaiser Aluminum is 2.59 times less risky than Origin Agritech. It trades about 0.06 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 171.00 in Origin Agritech on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Origin Agritech or generate 41.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Kaiser Aluminum vs. Origin Agritech
Performance |
| Timeline |
| Kaiser Aluminum |
| Origin Agritech |
Kaiser Aluminum and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaiser Aluminum and Origin Agritech
The main advantage of trading using opposite Kaiser Aluminum and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum 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.| Kaiser Aluminum vs. Silicon Motion Technology | Kaiser Aluminum vs. PTT Global Chemical | Kaiser Aluminum vs. Brockhaus Capital Management | Kaiser Aluminum vs. SEKISUI CHEMICAL |
| Origin Agritech vs. SMA Solar Technology | Origin Agritech vs. Aedas Homes SA | Origin Agritech vs. PKSHA TECHNOLOGY INC | Origin Agritech vs. Vishay Intertechnology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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