Correlation Between Agricultural Bank and Chongqing Changan
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By analyzing existing cross correlation between Agricultural Bank of and Chongqing Changan Automobile, you can compare the effects of market volatilities on Agricultural Bank and Chongqing Changan 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 Agricultural Bank with a short position of Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Chongqing Changan.
Diversification Opportunities for Agricultural Bank and Chongqing Changan
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agricultural and Chongqing is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan and Agricultural Bank 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 Agricultural Bank of are associated (or correlated) with Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Chongqing Changan go up and down completely randomly.
Pair Corralation between Agricultural Bank and Chongqing Changan
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.46 times more return on investment than Chongqing Changan. However, Agricultural Bank of is 2.15 times less risky than Chongqing Changan. It trades about 0.1 of its potential returns per unit of risk. Chongqing Changan Automobile is currently generating about 0.02 per unit of risk. If you would invest 271.00 in Agricultural Bank of on September 4, 2024 and sell it today you would earn a total of 218.00 from holding Agricultural Bank of or generate 80.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Agricultural Bank |
| Chongqing Changan |
Agricultural Bank and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Chongqing Changan
The main advantage of trading using opposite Agricultural Bank and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Agricultural Bank vs. Liaoning Chengda Biotechnology | Agricultural Bank vs. Harvest Fund Management | Agricultural Bank vs. Guangzhou Zhujiang Brewery | Agricultural Bank vs. CICC Fund Management |
| Chongqing Changan vs. Industrial and Commercial | Chongqing Changan vs. China Construction Bank | Chongqing Changan vs. Agricultural Bank of | Chongqing Changan vs. Bank of China |
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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