Correlation Between Origin Energy and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Origin Energy 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 Origin Energy and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Energy Limited and Origin Agritech, you can compare the effects of market volatilities on Origin Energy 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 Origin Energy with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Energy and Origin Agritech.
Diversification Opportunities for Origin Energy and Origin Agritech
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Origin and Origin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Origin Energy Limited and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Origin Energy 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 Origin Energy 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 Origin Energy i.e., Origin Energy and Origin Agritech go up and down completely randomly.
Pair Corralation between Origin Energy and Origin Agritech
Assuming the 90 days trading horizon Origin Energy Limited is expected to generate 0.32 times more return on investment than Origin Agritech. However, Origin Energy Limited is 3.11 times less risky than Origin Agritech. It trades about 0.07 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.02 per unit of risk. If you would invest 352.00 in Origin Energy Limited on August 28, 2024 and sell it today you would earn a total of 298.00 from holding Origin Energy Limited or generate 84.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Energy Limited vs. Origin Agritech
Performance |
| Timeline |
| Origin Energy Limited |
| Origin Agritech |
Origin Energy and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Energy and Origin Agritech
The main advantage of trading using opposite Origin Energy and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Energy 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.| Origin Energy vs. Apple Inc | Origin Energy vs. Apple Inc | Origin Energy vs. Apple Inc | Origin Energy vs. Microsoft |
| Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc | Origin Agritech vs. Apple Inc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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