Correlation Between Hubeiyichang Transportation and Agricultural Bank
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By analyzing existing cross correlation between Hubeiyichang Transportation Group and Agricultural Bank of, you can compare the effects of market volatilities on Hubeiyichang Transportation and Agricultural Bank 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 Hubeiyichang Transportation with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubeiyichang Transportation and Agricultural Bank.
Diversification Opportunities for Hubeiyichang Transportation and Agricultural Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hubeiyichang and Agricultural is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hubeiyichang Transportation Gr and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Hubeiyichang Transportation 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 Hubeiyichang Transportation Group are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Hubeiyichang Transportation i.e., Hubeiyichang Transportation and Agricultural Bank go up and down completely randomly.
Pair Corralation between Hubeiyichang Transportation and Agricultural Bank
Assuming the 90 days trading horizon Hubeiyichang Transportation is expected to generate 1.54 times less return on investment than Agricultural Bank. In addition to that, Hubeiyichang Transportation is 1.35 times more volatile than Agricultural Bank of. It trades about 0.16 of its total potential returns per unit of risk. Agricultural Bank of is currently generating about 0.33 per unit of volatility. If you would invest 465.00 in Agricultural Bank of on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Agricultural Bank of or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubeiyichang Transportation Gr vs. Agricultural Bank of
Performance |
| Timeline |
| Hubeiyichang Transportation |
| Agricultural Bank |
Hubeiyichang Transportation and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubeiyichang Transportation and Agricultural Bank
The main advantage of trading using opposite Hubeiyichang Transportation and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubeiyichang Transportation position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.The idea behind Hubeiyichang Transportation Group and Agricultural Bank of 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.
| Agricultural Bank vs. Industrial and Commercial | Agricultural Bank vs. China Construction Bank | Agricultural Bank vs. Bank of China | Agricultural Bank vs. PetroChina Co Ltd |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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