Correlation Between Heilongjiang Transport and Agricultural Bank
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By analyzing existing cross correlation between Heilongjiang Transport Development and Agricultural Bank of, you can compare the effects of market volatilities on Heilongjiang Transport 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 Heilongjiang Transport with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Agricultural Bank.
Diversification Opportunities for Heilongjiang Transport and Agricultural Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heilongjiang and Agricultural is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Heilongjiang Transport 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 Heilongjiang Transport Development 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 Heilongjiang Transport i.e., Heilongjiang Transport and Agricultural Bank go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Agricultural Bank
Assuming the 90 days trading horizon Heilongjiang Transport Development is expected to generate 2.52 times more return on investment than Agricultural Bank. However, Heilongjiang Transport is 2.52 times more volatile than Agricultural Bank of. It trades about 0.17 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.33 per unit of risk. If you would invest 374.00 in Heilongjiang Transport Development on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Heilongjiang Transport Development or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Agricultural Bank of
Performance |
| Timeline |
| Heilongjiang Transport |
| Agricultural Bank |
Heilongjiang Transport and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Agricultural Bank
The main advantage of trading using opposite Heilongjiang Transport and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport 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 Heilongjiang Transport Development 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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