Correlation Between Origin Agritech and Covenant Logistics
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Covenant Logistics 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 Covenant Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Covenant Logistics Group, you can compare the effects of market volatilities on Origin Agritech and Covenant Logistics 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 Covenant Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Covenant Logistics.
Diversification Opportunities for Origin Agritech and Covenant Logistics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Origin and Covenant is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Covenant Logistics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covenant Logistics 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 Covenant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covenant Logistics has no effect on the direction of Origin Agritech i.e., Origin Agritech and Covenant Logistics go up and down completely randomly.
Pair Corralation between Origin Agritech and Covenant Logistics
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Covenant Logistics. In addition to that, Origin Agritech is 2.25 times more volatile than Covenant Logistics Group. It trades about -0.16 of its total potential returns per unit of risk. Covenant Logistics Group is currently generating about 0.14 per unit of volatility. If you would invest 2,600 in Covenant Logistics Group on October 23, 2024 and sell it today you would earn a total of 120.00 from holding Covenant Logistics Group or generate 4.62% 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. Covenant Logistics Group
Performance |
Timeline |
Origin Agritech |
Covenant Logistics |
Origin Agritech and Covenant Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Agritech and Covenant Logistics
The main advantage of trading using opposite Origin Agritech and Covenant Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Covenant Logistics 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 Covenant Logistics will offset losses from the drop in Covenant Logistics' long position.Origin Agritech vs. Chuangs China Investments | Origin Agritech vs. ECHO INVESTMENT ZY | Origin Agritech vs. Japan Asia Investment | Origin Agritech vs. Air Lease |
Covenant Logistics vs. SCHNEIDER NATLINC CLB | Covenant Logistics vs. ArcBest | Covenant Logistics vs. Seino Holdings Co | Covenant Logistics vs. Heartland Express |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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