Correlation Between Origin Agritech and PARKEN Sport

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Can any of the company-specific risk be diversified away by investing in both Origin Agritech and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Origin Agritech and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and PARKEN Sport.

Diversification Opportunities for Origin Agritech and PARKEN Sport

OriginPARKENDiversified AwayOriginPARKENDiversified Away100%
-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Origin and PARKEN is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Origin Agritech i.e., Origin Agritech and PARKEN Sport go up and down completely randomly.

Pair Corralation between Origin Agritech and PARKEN Sport

Assuming the 90 days trading horizon Origin Agritech is expected to generate 3.24 times less return on investment than PARKEN Sport. In addition to that, Origin Agritech is 2.57 times more volatile than PARKEN Sport Entertainment. It trades about 0.01 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.11 per unit of volatility. If you would invest  1,590  in PARKEN Sport Entertainment on November 19, 2024 and sell it today you would earn a total of  225.00  from holding PARKEN Sport Entertainment or generate 14.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Origin Agritech  vs.  PARKEN Sport Entertainment

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.1539O1 D2V
       Timeline  
Origin Agritech 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.822.22.42.6
PARKEN Sport Enterta 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PARKEN Sport Entertainment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PARKEN Sport reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15.51616.51717.51818.5

Origin Agritech and PARKEN Sport Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.93-6.69-4.45-2.2-0.03622.14.276.448.6110.78 0.020.040.060.08
JavaScript chart by amCharts 3.21.1539O1 D2V
       Returns  

Pair Trading with Origin Agritech and PARKEN Sport

The main advantage of trading using opposite Origin Agritech and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.
The idea behind Origin Agritech and PARKEN Sport Entertainment 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.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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