Correlation Between MGIC INVESTMENT and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT 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 MGIC INVESTMENT and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Origin Agritech, you can compare the effects of market volatilities on MGIC INVESTMENT 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 MGIC INVESTMENT with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Origin Agritech.
Diversification Opportunities for MGIC INVESTMENT and Origin Agritech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGIC and Origin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and MGIC INVESTMENT 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 MGIC INVESTMENT 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 MGIC INVESTMENT i.e., MGIC INVESTMENT and Origin Agritech go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Origin Agritech
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.28 times more return on investment than Origin Agritech. However, MGIC INVESTMENT is 3.53 times less risky than Origin Agritech. It trades about 0.03 of its potential returns per unit of risk. Origin Agritech is currently generating about 0.01 per unit of risk. If you would invest 2,267 in MGIC INVESTMENT on September 19, 2024 and sell it today you would earn a total of 53.00 from holding MGIC INVESTMENT or generate 2.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
MGIC INVESTMENT vs. Origin Agritech
Performance |
Timeline |
MGIC INVESTMENT |
Origin Agritech |
MGIC INVESTMENT and Origin Agritech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGIC INVESTMENT and Origin Agritech
The main advantage of trading using opposite MGIC INVESTMENT and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT 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.MGIC INVESTMENT vs. 24SEVENOFFICE GROUP AB | MGIC INVESTMENT vs. CeoTronics AG | MGIC INVESTMENT vs. Perdoceo Education | MGIC INVESTMENT vs. Brockhaus Capital Management |
Origin Agritech vs. MGIC INVESTMENT | Origin Agritech vs. REGAL ASIAN INVESTMENTS | Origin Agritech vs. REINET INVESTMENTS SCA | Origin Agritech vs. MELIA HOTELS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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