Correlation Between BRAEMAR HOTELS and Origin Agritech

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

By analyzing existing cross correlation between BRAEMAR HOTELS RES and Origin Agritech, you can compare the effects of market volatilities on BRAEMAR HOTELS and Origin Agritech 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 BRAEMAR HOTELS with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAEMAR HOTELS and Origin Agritech.

Diversification Opportunities for BRAEMAR HOTELS and Origin Agritech

-0.15

Correlation Coefficient

BRAEMAR HOTELS  Origin Agritech

Good diversification

The 3 months correlation between BRAEMAR and Origin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding BRAEMAR HOTELS RES and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and BRAEMAR HOTELS 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 BRAEMAR HOTELS RES are associated (or correlated) with Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of BRAEMAR HOTELS i.e., BRAEMAR HOTELS and Origin Agritech go up and down completely randomly.

Pair Corralation between BRAEMAR HOTELS and Origin Agritech

Assuming the 90 days horizon BRAEMAR HOTELS RES is expected to under-perform the Origin Agritech. But the stock apears to be less risky and, when comparing its historical volatility, BRAEMAR HOTELS RES is 1.72 times less risky than Origin Agritech. The stock trades about -0.07 of its potential returns per unit of risk. The Origin Agritech is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  204.00  in Origin Agritech on December 30, 2024 and sell it today you would lose (16.00) from holding Origin Agritech or give up 7.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BRAEMAR HOTELS RES  vs.  Origin Agritech

BRAEMAR HOTELS RES

Risk-Adjusted Performance

Very Weak

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

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 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.

Pair Trading with BRAEMAR HOTELS and Origin Agritech

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

The idea behind BRAEMAR HOTELS RES and Origin Agritech 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.