Correlation Between Agricultural Bank and Chongqing Zhifei
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By analyzing existing cross correlation between Agricultural Bank of and Chongqing Zhifei Bio, you can compare the effects of market volatilities on Agricultural Bank and Chongqing Zhifei 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 Zhifei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Chongqing Zhifei.
Diversification Opportunities for Agricultural Bank and Chongqing Zhifei
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Chongqing is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Chongqing Zhifei Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Zhifei Bio 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 Zhifei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Zhifei Bio has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Chongqing Zhifei go up and down completely randomly.
Pair Corralation between Agricultural Bank and Chongqing Zhifei
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.39 times more return on investment than Chongqing Zhifei. However, Agricultural Bank of is 2.53 times less risky than Chongqing Zhifei. It trades about 0.11 of its potential returns per unit of risk. Chongqing Zhifei Bio is currently generating about -0.06 per unit of risk. If you would invest 364.00 in Agricultural Bank of on September 14, 2024 and sell it today you would earn a total of 139.00 from holding Agricultural Bank of or generate 38.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Agricultural Bank of vs. Chongqing Zhifei Bio
Performance |
| Timeline |
| Agricultural Bank |
| Chongqing Zhifei Bio |
Agricultural Bank and Chongqing Zhifei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Chongqing Zhifei
The main advantage of trading using opposite Agricultural Bank and Chongqing Zhifei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Chongqing Zhifei 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 Zhifei will offset losses from the drop in Chongqing Zhifei's long position.| Agricultural Bank vs. Industrial and Commercial | Agricultural Bank vs. China Construction Bank | Agricultural Bank vs. Bank of China | Agricultural Bank vs. PetroChina Co Ltd |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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