Correlation Between Keyera Corp and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Keyera Corp 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 Keyera Corp and Origin Agritech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyera Corp and Origin Agritech, you can compare the effects of market volatilities on Keyera Corp 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 Keyera Corp with a short position of Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyera Corp and Origin Agritech.
Diversification Opportunities for Keyera Corp and Origin Agritech
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keyera and Origin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Keyera Corp and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech and Keyera Corp 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 Keyera Corp 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 Keyera Corp i.e., Keyera Corp and Origin Agritech go up and down completely randomly.
Pair Corralation between Keyera Corp and Origin Agritech
Assuming the 90 days trading horizon Keyera Corp is expected to generate 0.17 times more return on investment than Origin Agritech. However, Keyera Corp is 5.75 times less risky than Origin Agritech. It trades about 0.23 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.08 per unit of risk. If you would invest 3,419 in Keyera Corp on January 26, 2024 and sell it today you would earn a total of 137.00 from holding Keyera Corp or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyera Corp vs. Origin Agritech
Performance |
| Timeline |
| Keyera Corp |
| Origin Agritech |
Keyera Corp and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyera Corp and Origin Agritech
The main advantage of trading using opposite Keyera Corp and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyera Corp 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.| Keyera Corp vs. Forsys Metals Corp | Keyera Corp vs. Pinetree Capital | Keyera Corp vs. Aston Bay Holdings |
| Origin Agritech vs. Benson Hill | Origin Agritech vs. Corteva | Origin Agritech vs. Scotts Miracle Gro | Origin Agritech vs. Yara International ASA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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