Correlation Between Agricultural Bank and GRG Banking
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By analyzing existing cross correlation between Agricultural Bank of and GRG Banking Equipment, you can compare the effects of market volatilities on Agricultural Bank and GRG Banking 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 GRG Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and GRG Banking.
Diversification Opportunities for Agricultural Bank and GRG Banking
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agricultural and GRG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and GRG Banking Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRG Banking Equipment 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 GRG Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRG Banking Equipment has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and GRG Banking go up and down completely randomly.
Pair Corralation between Agricultural Bank and GRG Banking
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.71 times more return on investment than GRG Banking. However, Agricultural Bank of is 1.42 times less risky than GRG Banking. It trades about 0.08 of its potential returns per unit of risk. GRG Banking Equipment is currently generating about -0.02 per unit of risk. If you would invest 508.00 in Agricultural Bank of on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Agricultural Bank of or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. GRG Banking Equipment
Performance |
| Timeline |
| Agricultural Bank |
| GRG Banking Equipment |
Agricultural Bank and GRG Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and GRG Banking
The main advantage of trading using opposite Agricultural Bank and GRG Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, GRG Banking 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 GRG Banking will offset losses from the drop in GRG Banking's long position.The idea behind Agricultural Bank of and GRG Banking Equipment 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.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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