Correlation Between Origin Agritech and ACANTHE DEVELOPPEM

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

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

Diversification Opportunities for Origin Agritech and ACANTHE DEVELOPPEM

0.6

Correlation Coefficient

Origin Agritech  ACANTHE DEVELOPPEM

Poor diversification

The 3 months correlation between Origin and ACANTHE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and ACANTHE DEVELOPPEM ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACANTHE DEVELOPPEM 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 ACANTHE DEVELOPPEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACANTHE DEVELOPPEM has no effect on the direction of Origin Agritech i.e., Origin Agritech and ACANTHE DEVELOPPEM go up and down completely randomly.

Pair Corralation between Origin Agritech and ACANTHE DEVELOPPEM

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the ACANTHE DEVELOPPEM. In addition to that, Origin Agritech is 1.5 times more volatile than ACANTHE DEVELOPPEM ON. It trades about -0.02 of its total potential returns per unit of risk. ACANTHE DEVELOPPEM ON is currently generating about 0.02 per unit of volatility. If you would invest  27.00  in ACANTHE DEVELOPPEM ON on October 23, 2024 and sell it today you would earn a total of  0.00  from holding ACANTHE DEVELOPPEM ON or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Origin Agritech  vs.  ACANTHE DEVELOPPEM ON

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.

ACANTHE DEVELOPPEM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACANTHE DEVELOPPEM ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

Pair Trading with Origin Agritech and ACANTHE DEVELOPPEM

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

The idea behind Origin Agritech and ACANTHE DEVELOPPEM ON 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.