Correlation Between Origin Agritech and Nutrien
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Nutrien 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 Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Nutrien, you can compare the effects of market volatilities on Origin Agritech and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Nutrien.
Diversification Opportunities for Origin Agritech and Nutrien
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and Nutrien is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Origin Agritech i.e., Origin Agritech and Nutrien go up and down completely randomly.
Pair Corralation between Origin Agritech and Nutrien
Given the investment horizon of 90 days Origin Agritech is expected to under-perform the Nutrien. In addition to that, Origin Agritech is 3.19 times more volatile than Nutrien. It trades about -0.01 of its total potential returns per unit of risk. Nutrien is currently generating about 0.05 per unit of volatility. If you would invest 4,606 in Nutrien on September 15, 2024 and sell it today you would earn a total of 187.00 from holding Nutrien or generate 4.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Origin Agritech vs. Nutrien
Performance |
Timeline |
Origin Agritech |
Nutrien |
Origin Agritech and Nutrien Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Agritech and Nutrien
The main advantage of trading using opposite Origin Agritech and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.Origin Agritech vs. Benson Hill, Common | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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