Correlation Between Origin Agritech and Algebris UCITS

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

By analyzing existing cross correlation between Origin Agritech and Algebris UCITS Funds, you can compare the effects of market volatilities on Origin Agritech and Algebris UCITS 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 Algebris UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Algebris UCITS.

Diversification Opportunities for Origin Agritech and Algebris UCITS

-0.23

Correlation Coefficient

Origin Agritech  Algebris UCITS

Very good diversification

The 3 months correlation between Origin and Algebris is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Algebris UCITS Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algebris UCITS Funds 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 Algebris UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algebris UCITS Funds has no effect on the direction of Origin Agritech i.e., Origin Agritech and Algebris UCITS go up and down completely randomly.

Pair Corralation between Origin Agritech and Algebris UCITS

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Algebris UCITS. In addition to that, Origin Agritech is 40.38 times more volatile than Algebris UCITS Funds. It trades about -0.09 of its total potential returns per unit of risk. Algebris UCITS Funds is currently generating about 0.22 per unit of volatility. If you would invest  14,413  in Algebris UCITS Funds on October 8, 2024 and sell it today you would earn a total of  518.00  from holding Algebris UCITS Funds or generate 3.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Origin Agritech  vs.  Algebris UCITS Funds

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.

Algebris UCITS Funds

Risk-Adjusted Performance

0 of 100

Insignificant

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

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

The idea behind Origin Agritech and Algebris UCITS Funds 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.