Correlation Between Origin Agritech and Glatfelter

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

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

Diversification Opportunities for Origin Agritech and Glatfelter

-0.13

Correlation Coefficient

Origin Agritech  Glatfelter

Good diversification

The 3 months correlation between Origin and Glatfelter is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Glatfelter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glatfelter 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 Glatfelter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glatfelter has no effect on the direction of Origin Agritech i.e., Origin Agritech and Glatfelter go up and down completely randomly.

Pair Corralation between Origin Agritech and Glatfelter

Assuming the 90 days trading horizon Origin Agritech is expected to generate 2.09 times more return on investment than Glatfelter. However, Origin Agritech is 2.09 times more volatile than Glatfelter. It trades about 0.01 of its potential returns per unit of risk. Glatfelter is currently generating about 0.01 per unit of risk. If you would invest  230.00  in Origin Agritech on September 19, 2024 and sell it today you would lose (10.00) from holding Origin Agritech or give up 4.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Origin Agritech  vs.  Glatfelter

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 nearly stable basic indicators, Origin Agritech is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Glatfelter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glatfelter has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Glatfelter 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 Glatfelter

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

The idea behind Origin Agritech and Glatfelter 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.