Correlation Between Origin Agritech and Amundi Convictions

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

Diversification Opportunities for Origin Agritech and Amundi Convictions

0.33

Correlation Coefficient

Origin Agritech  Amundi Convictions

Weak diversification

The 3 months correlation between Origin and Amundi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Amundi Convictions ESR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Convictions ESR 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 Convictions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Convictions ESR has no effect on the direction of Origin Agritech i.e., Origin Agritech and Amundi Convictions go up and down completely randomly.

Pair Corralation between Origin Agritech and Amundi Convictions

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Amundi Convictions. In addition to that, Origin Agritech is 8.91 times more volatile than Amundi Convictions ESR. It trades about -0.03 of its total potential returns per unit of risk. Amundi Convictions ESR is currently generating about -0.06 per unit of volatility. If you would invest  19,502  in Amundi Convictions ESR on December 25, 2024 and sell it today you would lose (363.00) from holding Amundi Convictions ESR or give up 1.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.67%
Values	Daily Returns

Origin Agritech  vs.  Amundi Convictions ESR

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 Convictions ESR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amundi Convictions ESR has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Amundi Convictions 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 Convictions

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

The idea behind Origin Agritech and Amundi Convictions ESR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.