Correlation Between Origin Agritech and Intel

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

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

Diversification Opportunities for Origin Agritech and Intel

0.09

Correlation Coefficient

Origin Agritech  Intel

Significant diversification

The 3 months correlation between Origin and Intel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Origin Agritech i.e., Origin Agritech and Intel go up and down completely randomly.

Pair Corralation between Origin Agritech and Intel

Assuming the 90 days trading horizon Origin Agritech is expected to generate 1.02 times less return on investment than Intel. In addition to that, Origin Agritech is 1.49 times more volatile than Intel. It trades about 0.05 of its total potential returns per unit of risk. Intel is currently generating about 0.08 per unit of volatility. If you would invest  1,977  in Intel on August 31, 2024 and sell it today you would earn a total of  256.00  from holding Intel or generate 12.95% return on investment over 90 days.

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

Origin Agritech  vs.  Intel

Origin Agritech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Origin Agritech reported solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Origin Agritech and Intel

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

The idea behind Origin Agritech and Intel 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.