Correlation Between Scotts Miracle and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Scotts Miracle 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 Scotts Miracle and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scotts Miracle Gro and Origin Agritech, you can compare the effects of market volatilities on Scotts Miracle 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 Scotts Miracle with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts Miracle and Origin Agritech.
Diversification Opportunities for Scotts Miracle and Origin Agritech
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scotts and Origin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Scotts Miracle 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 Scotts Miracle Gro 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 Scotts Miracle i.e., Scotts Miracle and Origin Agritech go up and down completely randomly.
Pair Corralation between Scotts Miracle and Origin Agritech
Considering the 90-day investment horizon Scotts Miracle Gro is expected to under-perform the Origin Agritech. In addition to that, Scotts Miracle is 1.03 times more volatile than Origin Agritech. It trades about -0.11 of its total potential returns per unit of risk. Origin Agritech is currently generating about 0.01 per unit of volatility. If you would invest 260.00 in Origin Agritech on August 31, 2024 and sell it today you would lose (3.00) from holding Origin Agritech or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scotts Miracle Gro vs. Origin Agritech
Performance |
| Timeline |
| Scotts Miracle Gro |
| Origin Agritech |
Scotts Miracle and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotts Miracle and Origin Agritech
The main advantage of trading using opposite Scotts Miracle and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts Miracle 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.| Scotts Miracle vs. Corteva | Scotts Miracle vs. CF Industries Holdings | Scotts Miracle vs. American Vanguard | Scotts Miracle vs. Intrepid Potash |
| Origin Agritech vs. Benson Hill, Common | Origin Agritech vs. Corteva | Origin Agritech vs. Scotts Miracle Gro | Origin Agritech vs. Yara International ASA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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