Correlation Between Origin Agritech and Amundi Actions

Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Amundi Actions 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 Agritech and Amundi Actions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Origin Agritech and Amundi Actions Internationales, you can compare the effects of market volatilities on Origin Agritech and Amundi Actions 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 Agritech with a short position of Amundi Actions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Amundi Actions.

Diversification Opportunities for Origin Agritech and Amundi Actions

-0.57

Correlation Coefficient

Origin Agritech  Amundi Actions

Excellent diversification

The 3 months correlation between Origin and Amundi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Amundi Actions Internationales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Actions Inter and Origin Agritech 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 Agritech are associated (or correlated) with Amundi Actions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Actions Inter has no effect on the direction of Origin Agritech i.e., Origin Agritech and Amundi Actions go up and down completely randomly.

Pair Corralation between Origin Agritech and Amundi Actions

Assuming the 90 days trading horizon Origin Agritech is expected to generate 10.03 times more return on investment than Amundi Actions. However, Origin Agritech is 10.03 times more volatile than Amundi Actions Internationales. It trades about 0.01 of its potential returns per unit of risk. Amundi Actions Internationales is currently generating about 0.13 per unit of risk. If you would invest  292.00  in Origin Agritech on October 6, 2024 and sell it today you would lose (90.00) from holding Origin Agritech or give up 30.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.68%
Values	Daily Returns

Origin Agritech  vs.  Amundi Actions Internationales

Origin Agritech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Agritech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Amundi Actions Inter

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Amundi Actions Internationales has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Amundi Actions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Origin Agritech and Amundi Actions

The main advantage of trading using opposite Origin Agritech and Amundi Actions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Amundi Actions 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 Amundi Actions will offset losses from the drop in Amundi Actions' long position.

The idea behind Origin Agritech and Amundi Actions Internationales pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..