Correlation Between Origin Agritech and Allianz Clean

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

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

Diversification Opportunities for Origin Agritech and Allianz Clean

0.37

Correlation Coefficient

Origin Agritech  Allianz Clean

Weak diversification

The 3 months correlation between Origin and Allianz is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Allianz Clean Planet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Clean Planet 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 Allianz Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Clean Planet has no effect on the direction of Origin Agritech i.e., Origin Agritech and Allianz Clean go up and down completely randomly.

Pair Corralation between Origin Agritech and Allianz Clean

Assuming the 90 days trading horizon Origin Agritech is expected to generate 7.42 times more return on investment than Allianz Clean. However, Origin Agritech is 7.42 times more volatile than Allianz Clean Planet. It trades about 0.04 of its potential returns per unit of risk. Allianz Clean Planet is currently generating about 0.05 per unit of risk. If you would invest  177.00  in Origin Agritech on October 10, 2024 and sell it today you would earn a total of  13.00  from holding Origin Agritech or generate 7.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Origin Agritech  vs.  Allianz Clean Planet

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.

Allianz Clean Planet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianz Clean Planet has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Allianz Clean is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Origin Agritech and Allianz Clean

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

The idea behind Origin Agritech and Allianz Clean Planet 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.