Correlation Between Agricultural Bank and Suzhou TAA
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By analyzing existing cross correlation between Agricultural Bank of and Suzhou TAA Ultra, you can compare the effects of market volatilities on Agricultural Bank and Suzhou TAA 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 Suzhou TAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Suzhou TAA.
Diversification Opportunities for Agricultural Bank and Suzhou TAA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agricultural and Suzhou is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Suzhou TAA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou TAA Ultra 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 Suzhou TAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou TAA Ultra has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Suzhou TAA go up and down completely randomly.
Pair Corralation between Agricultural Bank and Suzhou TAA
Assuming the 90 days trading horizon Agricultural Bank of is expected to under-perform the Suzhou TAA. But the stock apears to be less risky and, when comparing its historical volatility, Agricultural Bank of is 1.36 times less risky than Suzhou TAA. The stock trades about -0.13 of its potential returns per unit of risk. The Suzhou TAA Ultra is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 2,183 in Suzhou TAA Ultra on November 9, 2024 and sell it today you would earn a total of 54.00 from holding Suzhou TAA Ultra or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 12.5% |
| Values | Daily Returns |
Agricultural Bank of vs. Suzhou TAA Ultra
Performance |
| Timeline |
| Agricultural Bank |
Risk-Adjusted Performance
OK
Weak | Strong |
| Suzhou TAA Ultra |
Risk-Adjusted Performance
Excellent
Weak | Strong |
Agricultural Bank and Suzhou TAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Suzhou TAA
The main advantage of trading using opposite Agricultural Bank and Suzhou TAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Suzhou TAA 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 Suzhou TAA will offset losses from the drop in Suzhou TAA's long position.The idea behind Agricultural Bank of and Suzhou TAA Ultra 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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