Correlation Between Origin Agritech and MYFAIR GOLD

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

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

Diversification Opportunities for Origin Agritech and MYFAIR GOLD

0.26

Correlation Coefficient

Origin Agritech  MYFAIR GOLD

Modest diversification

The 3 months correlation between Origin and MYFAIR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P 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 MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of Origin Agritech i.e., Origin Agritech and MYFAIR GOLD go up and down completely randomly.

Pair Corralation between Origin Agritech and MYFAIR GOLD

Assuming the 90 days trading horizon Origin Agritech is expected to generate 4.52 times less return on investment than MYFAIR GOLD. In addition to that, Origin Agritech is 2.16 times more volatile than MYFAIR GOLD P. It trades about 0.0 of its total potential returns per unit of risk. MYFAIR GOLD P is currently generating about 0.02 per unit of volatility. If you would invest  108.00  in MYFAIR GOLD P on December 30, 2024 and sell it today you would earn a total of  1.00  from holding MYFAIR GOLD P or generate 0.93% 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.  MYFAIR GOLD P

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 nearly stable basic indicators, Origin Agritech is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MYFAIR GOLD P

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MYFAIR GOLD P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MYFAIR GOLD is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Origin Agritech and MYFAIR GOLD

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

The idea behind Origin Agritech and MYFAIR GOLD P 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.