Correlation Between Origin Agritech and Ecora Resources

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

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

Diversification Opportunities for Origin Agritech and Ecora Resources

0.0

Correlation Coefficient

Origin Agritech  Ecora Resources

Pay attention - limited upside

The 3 months correlation between Origin and Ecora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Ecora Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecora Resources PLC 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 Ecora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecora Resources PLC has no effect on the direction of Origin Agritech i.e., Origin Agritech and Ecora Resources go up and down completely randomly.

Pair Corralation between Origin Agritech and Ecora Resources

If you would invest (100.00) in Ecora Resources PLC on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Ecora Resources PLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Origin Agritech  vs.  Ecora Resources PLC

Origin Agritech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origin Agritech 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.

Ecora Resources PLC

Risk-Adjusted Performance

Weak

Over the last 90 days Ecora Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ecora Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Origin Agritech and Ecora Resources

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

The idea behind Origin Agritech and Ecora Resources PLC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.