Correlation Between Origin Agritech and REYNA SILVER

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

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

Diversification Opportunities for Origin Agritech and REYNA SILVER

-0.29

Correlation Coefficient

Origin Agritech  REYNA SILVER

Very good diversification

The 3 months correlation between Origin and REYNA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and REYNA SILVER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REYNA SILVER P 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 REYNA SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REYNA SILVER P has no effect on the direction of Origin Agritech i.e., Origin Agritech and REYNA SILVER go up and down completely randomly.

Pair Corralation between Origin Agritech and REYNA SILVER

Assuming the 90 days trading horizon Origin Agritech is expected to generate 0.42 times more return on investment than REYNA SILVER. However, Origin Agritech is 2.36 times less risky than REYNA SILVER. It trades about -0.16 of its potential returns per unit of risk. REYNA SILVER P is currently generating about -0.11 per unit of risk. If you would invest  484.00  in Origin Agritech on April 7, 2024 and sell it today you would lose (48.00) from holding Origin Agritech or give up 9.92% of portfolio value over 90 days.

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

Origin Agritech  vs.  REYNA SILVER P

Origin Agritech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 10 (%) 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.

REYNA SILVER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REYNA SILVER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Origin Agritech and REYNA SILVER

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

The idea behind Origin Agritech and REYNA SILVER P 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.