Correlation Between Airbus SE and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Airbus SE 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 Airbus SE and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airbus SE and Origin Agritech, you can compare the effects of market volatilities on Airbus SE 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 Airbus SE with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airbus SE and Origin Agritech.
Diversification Opportunities for Airbus SE and Origin Agritech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airbus and Origin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Airbus SE and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Airbus SE 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 Airbus SE 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 Airbus SE i.e., Airbus SE and Origin Agritech go up and down completely randomly.
Pair Corralation between Airbus SE and Origin Agritech
Assuming the 90 days trading horizon Airbus SE is expected to generate 0.25 times more return on investment than Origin Agritech. However, Airbus SE is 4.06 times less risky than Origin Agritech. It trades about 0.13 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.07 per unit of risk. If you would invest 15,056 in Airbus SE on December 2, 2024 and sell it today you would earn a total of 1,512 from holding Airbus SE or generate 10.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Airbus SE vs. Origin Agritech
Performance |
Timeline |
Airbus SE |
Origin Agritech |
Airbus SE and Origin Agritech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Airbus SE and Origin Agritech
The main advantage of trading using opposite Airbus SE and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airbus SE 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.Airbus SE vs. Television Broadcasts Limited | Airbus SE vs. Sekisui Chemical Co | Airbus SE vs. EVS Broadcast Equipment | Airbus SE vs. Sinopec Shanghai Petrochemical |
Origin Agritech vs. Spirent Communications plc | Origin Agritech vs. Kingdee International Software | Origin Agritech vs. ASURE SOFTWARE | Origin Agritech vs. Hemisphere Energy Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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