Correlation Between IT Tech and Origin Agritech

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

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

Diversification Opportunities for IT Tech and Origin Agritech

0.56

Correlation Coefficient

IT Tech  Origin Agritech

Very weak diversification

The 3 months correlation between ITP and Origin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding IT Tech Packaging and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and IT Tech 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 IT Tech Packaging 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 IT Tech i.e., IT Tech and Origin Agritech go up and down completely randomly.

Pair Corralation between IT Tech and Origin Agritech

Considering the 90-day investment horizon IT Tech is expected to generate 1.9 times less return on investment than Origin Agritech. In addition to that, IT Tech is 1.17 times more volatile than Origin Agritech. It trades about 0.08 of its total potential returns per unit of risk. Origin Agritech is currently generating about 0.18 per unit of volatility. If you would invest  98.00  in Origin Agritech on July 31, 2025 and sell it today you would earn a total of  95.00  from holding Origin Agritech or generate 96.94% return on investment over 90 days.

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

IT Tech Packaging  vs.  Origin Agritech

IT Tech Packaging

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in IT Tech Packaging are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IT Tech reported solid returns over the last few months and may actually be approaching a breakup point.

Origin Agritech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Origin Agritech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IT Tech and Origin Agritech

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

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.