Correlation Between Origin Agritech and Amundi Label

Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Amundi Label 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 Label 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 Label Equilibre, you can compare the effects of market volatilities on Origin Agritech and Amundi Label 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 Label. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Amundi Label.

Diversification Opportunities for Origin Agritech and Amundi Label

-0.02

Correlation Coefficient

Origin Agritech  Amundi Label

Good diversification

The 3 months correlation between Origin and Amundi is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Amundi Label Equilibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Label Equilibre 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 Label. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Label Equilibre has no effect on the direction of Origin Agritech i.e., Origin Agritech and Amundi Label go up and down completely randomly.

Pair Corralation between Origin Agritech and Amundi Label

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Amundi Label. In addition to that, Origin Agritech is 11.62 times more volatile than Amundi Label Equilibre. It trades about -0.03 of its total potential returns per unit of risk. Amundi Label Equilibre is currently generating about 0.16 per unit of volatility. If you would invest  16,863  in Amundi Label Equilibre on December 25, 2024 and sell it today you would earn a total of  701.00  from holding Amundi Label Equilibre or generate 4.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Origin Agritech  vs.  Amundi Label Equilibre

Origin Agritech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origin Agritech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Amundi Label Equilibre

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Label Equilibre are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Amundi Label is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Origin Agritech and Amundi Label

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

The idea behind Origin Agritech and Amundi Label Equilibre 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..