Correlation Between Origin Agritech and SAXLUND GROUP

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

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

Diversification Opportunities for Origin Agritech and SAXLUND GROUP

0.42

Correlation Coefficient

Origin Agritech  SAXLUND GROUP

Very weak diversification

The 3 months correlation between Origin and SAXLUND is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and SAXLUND GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAXLUND GROUP AB 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 SAXLUND GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAXLUND GROUP AB has no effect on the direction of Origin Agritech i.e., Origin Agritech and SAXLUND GROUP go up and down completely randomly.

Pair Corralation between Origin Agritech and SAXLUND GROUP

If you would invest  20.00  in SAXLUND GROUP AB on October 23, 2024 and sell it today you would earn a total of  0.00  from holding SAXLUND GROUP AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Origin Agritech  vs.  SAXLUND GROUP AB

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.

SAXLUND GROUP AB

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAXLUND GROUP AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SAXLUND GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Origin Agritech and SAXLUND GROUP

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

The idea behind Origin Agritech and SAXLUND GROUP AB 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.