Correlation Between Identiv and Origin Agritech

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

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

Diversification Opportunities for Identiv and Origin Agritech

-0.37

Correlation Coefficient

Identiv  Origin Agritech

Very good diversification

The 3 months correlation between Identiv and Origin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Identiv and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Identiv 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 Identiv 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 Identiv i.e., Identiv and Origin Agritech go up and down completely randomly.

Pair Corralation between Identiv and Origin Agritech

Assuming the 90 days trading horizon Identiv is expected to under-perform the Origin Agritech. In addition to that, Identiv is 1.39 times more volatile than Origin Agritech. It trades about -0.32 of its total potential returns per unit of risk. Origin Agritech is currently generating about -0.14 per unit of volatility. If you would invest  346.00  in Origin Agritech on February 3, 2024 and sell it today you would lose (58.00) from holding Origin Agritech or give up 16.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Identiv  vs.  Origin Agritech

Identiv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Identiv 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 June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Origin Agritech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Origin Agritech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Identiv and Origin Agritech

The main advantage of trading using opposite Identiv and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv 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.

The idea behind Identiv and Origin Agritech 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.