Correlation Between Swiss Re and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Swiss Re 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 Swiss Re and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Re AG and Origin Agritech, you can compare the effects of market volatilities on Swiss Re 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 Swiss Re with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Re and Origin Agritech.
Diversification Opportunities for Swiss Re and Origin Agritech
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swiss and Origin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Re AG and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Swiss Re 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 Swiss Re 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 Swiss Re i.e., Swiss Re and Origin Agritech go up and down completely randomly.
Pair Corralation between Swiss Re and Origin Agritech
Assuming the 90 days trading horizon Swiss Re AG is expected to generate 0.27 times more return on investment than Origin Agritech. However, Swiss Re AG is 3.75 times less risky than Origin Agritech. It trades about 0.08 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.02 per unit of risk. If you would invest 2,104 in Swiss Re AG on November 5, 2024 and sell it today you would earn a total of 1,616 from holding Swiss Re AG or generate 76.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Swiss Re AG vs. Origin Agritech
Performance |
| Timeline |
| Swiss Re AG |
| Origin Agritech |
Swiss Re and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Re and Origin Agritech
The main advantage of trading using opposite Swiss Re and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Re 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.| Swiss Re vs. DAIDO METAL TD | Swiss Re vs. GREENX METALS LTD | Swiss Re vs. AEON METALS LTD | Swiss Re vs. Singapore Telecommunications Limited |
| Origin Agritech vs. NORTHEAST UTILITIES | Origin Agritech vs. ADDUS HOMECARE | Origin Agritech vs. HAVERTY FURNITURE A | Origin Agritech vs. KENEDIX OFFICE INV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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