Correlation Between Origin Agritech and SCOTTIE RESOURCES

Can any of the company-specific risk be diversified away by investing in both Origin Agritech and SCOTTIE 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 SCOTTIE 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 SCOTTIE RESOURCES P, you can compare the effects of market volatilities on Origin Agritech and SCOTTIE 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 SCOTTIE RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and SCOTTIE RESOURCES.

Diversification Opportunities for Origin Agritech and SCOTTIE RESOURCES

0.65

Correlation Coefficient

Origin Agritech  SCOTTIE RESOURCES

Poor diversification

The 3 months correlation between Origin and SCOTTIE is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and SCOTTIE RESOURCES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTTIE RESOURCES 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 SCOTTIE RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTTIE RESOURCES has no effect on the direction of Origin Agritech i.e., Origin Agritech and SCOTTIE RESOURCES go up and down completely randomly.

Pair Corralation between Origin Agritech and SCOTTIE RESOURCES

If you would invest  10.00  in SCOTTIE RESOURCES P on October 8, 2024 and sell it today you would earn a total of  0.00  from holding SCOTTIE RESOURCES P or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

Origin Agritech  vs.  SCOTTIE RESOURCES P

Origin Agritech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Origin Agritech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SCOTTIE RESOURCES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCOTTIE RESOURCES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Origin Agritech and SCOTTIE RESOURCES

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

The idea behind Origin Agritech and SCOTTIE RESOURCES P 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.