Correlation Between Origin Agritech and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and CanSino Biologics 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 CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and CanSino Biologics, you can compare the effects of market volatilities on Origin Agritech and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and CanSino Biologics.
Diversification Opportunities for Origin Agritech and CanSino Biologics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and CanSino is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of Origin Agritech i.e., Origin Agritech and CanSino Biologics go up and down completely randomly.
Pair Corralation between Origin Agritech and CanSino Biologics
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the CanSino Biologics. In addition to that, Origin Agritech is 1.27 times more volatile than CanSino Biologics. It trades about -0.03 of its total potential returns per unit of risk. CanSino Biologics is currently generating about 0.05 per unit of volatility. If you would invest 366.00 in CanSino Biologics on December 23, 2024 and sell it today you would earn a total of 30.00 from holding CanSino Biologics or generate 8.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Origin Agritech vs. CanSino Biologics
Performance |
Timeline |
Origin Agritech |
CanSino Biologics |
Origin Agritech and CanSino Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Agritech and CanSino Biologics
The main advantage of trading using opposite Origin Agritech and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.Origin Agritech vs. Sixt Leasing SE | Origin Agritech vs. SBA Communications Corp | Origin Agritech vs. Chengdu PUTIAN Telecommunications | Origin Agritech vs. Chunghwa Telecom Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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