Correlation Between Origin Agritech and HAMMONIA Schiffsholding

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

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

Diversification Opportunities for Origin Agritech and HAMMONIA Schiffsholding

-0.62

Correlation Coefficient

Origin Agritech  HAMMONIA Schiffsholding

Excellent diversification

The 3 months correlation between Origin and HAMMONIA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of Origin Agritech i.e., Origin Agritech and HAMMONIA Schiffsholding go up and down completely randomly.

Pair Corralation between Origin Agritech and HAMMONIA Schiffsholding

Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the HAMMONIA Schiffsholding. In addition to that, Origin Agritech is 2.49 times more volatile than HAMMONIA Schiffsholding AG. It trades about -0.08 of its total potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about 0.01 per unit of volatility. If you would invest  28,800  in HAMMONIA Schiffsholding AG on September 1, 2024 and sell it today you would lose (200.00) from holding HAMMONIA Schiffsholding AG or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.24%
Values	Daily Returns

Origin Agritech  vs.  HAMMONIA Schiffsholding AG

Origin Agritech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Origin Agritech may actually be approaching a critical reversion point that can send shares even higher in December 2024.

HAMMONIA Schiffsholding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAMMONIA Schiffsholding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HAMMONIA Schiffsholding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Origin Agritech and HAMMONIA Schiffsholding

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

The idea behind Origin Agritech and HAMMONIA Schiffsholding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.