Correlation Between Origin Agritech and Seagen

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Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Seagen 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 Seagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Seagen Inc, you can compare the effects of market volatilities on Origin Agritech and Seagen 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 Seagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Seagen.

Diversification Opportunities for Origin Agritech and Seagen

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Origin and Seagen is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Seagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagen Inc 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 Seagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagen Inc has no effect on the direction of Origin Agritech i.e., Origin Agritech and Seagen go up and down completely randomly.

Pair Corralation between Origin Agritech and Seagen

Given the investment horizon of 90 days Origin Agritech is expected to generate 2.57 times more return on investment than Seagen. However, Origin Agritech is 2.57 times more volatile than Seagen Inc. It trades about 0.03 of its potential returns per unit of risk. Seagen Inc is currently generating about 0.02 per unit of risk. If you would invest  915.00  in Origin Agritech on April 5, 2022 and sell it today you would lose (173.00)  from holding Origin Agritech or give up 18.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Origin Agritech  vs.  Seagen Inc

 Performance (%) 
      Timeline 
Origin Agritech 
Origin Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Origin Agritech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Origin Agritech is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Structure and Payout Changes

Last Split Factor
1:10
Dividend Date
2018-07-10
Last Split Date
2018-07-10

Origin Price Channel

Seagen Inc 
Seagen Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Seagen Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Seagen disclosed solid returns over the last few months and may actually be approaching a breakup point.

Seagen Price Channel

Origin Agritech and Seagen Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Origin Agritech and Seagen

The main advantage of trading using opposite Origin Agritech and Seagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Seagen 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 Seagen will offset losses from the drop in Seagen's long position.
The idea behind Origin Agritech and Seagen Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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