Correlation Between GuoChuang Software and Agricultural Bank
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By analyzing existing cross correlation between GuoChuang Software Co and Agricultural Bank of, you can compare the effects of market volatilities on GuoChuang Software 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 GuoChuang Software with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GuoChuang Software and Agricultural Bank.
Diversification Opportunities for GuoChuang Software and Agricultural Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between GuoChuang and Agricultural is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GuoChuang Software Co and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and GuoChuang Software 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 GuoChuang Software Co 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 GuoChuang Software i.e., GuoChuang Software and Agricultural Bank go up and down completely randomly.
Pair Corralation between GuoChuang Software and Agricultural Bank
Assuming the 90 days trading horizon GuoChuang Software Co is expected to generate 3.18 times more return on investment than Agricultural Bank. However, GuoChuang Software is 3.18 times more volatile than Agricultural Bank of. It trades about 0.08 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.07 per unit of risk. If you would invest 1,406 in GuoChuang Software Co on November 8, 2024 and sell it today you would earn a total of 1,165 from holding GuoChuang Software Co or generate 82.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GuoChuang Software Co vs. Agricultural Bank of
Performance |
| Timeline |
| GuoChuang Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Agricultural Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
GuoChuang Software and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GuoChuang Software and Agricultural Bank
The main advantage of trading using opposite GuoChuang Software and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GuoChuang Software 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 GuoChuang Software Co 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.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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