Correlation Between Origin Agritech and Alstria Office

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

By analyzing existing cross correlation between Origin Agritech and alstria office REIT AG, you can compare the effects of market volatilities on Origin Agritech and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Alstria Office.

Diversification Opportunities for Origin Agritech and Alstria Office

0.41

Correlation Coefficient

Origin Agritech  Alstria Office

Very weak diversification

The 3 months correlation between Origin and Alstria is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Origin Agritech i.e., Origin Agritech and Alstria Office go up and down completely randomly.

Pair Corralation between Origin Agritech and Alstria Office

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Alstria Office. In addition to that, Origin Agritech is 1.95 times more volatile than alstria office REIT AG. It trades about -0.02 of its total potential returns per unit of risk. alstria office REIT AG is currently generating about 0.02 per unit of volatility. If you would invest  513.00  in alstria office REIT AG on October 23, 2024 and sell it today you would earn a total of  21.00  from holding alstria office REIT AG or generate 4.09% return on investment over 90 days.

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

Origin Agritech  vs.  alstria office REIT AG

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.

alstria office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days alstria office REIT AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Origin Agritech and Alstria Office

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

The idea behind Origin Agritech and alstria office REIT AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.