Correlation Between Agricultural Bank and Dongguan Tarry
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By analyzing existing cross correlation between Agricultural Bank of and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Agricultural Bank and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Dongguan Tarry.
Diversification Opportunities for Agricultural Bank and Dongguan Tarry
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Dongguan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Agricultural Bank and Dongguan Tarry
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 12.74 times less return on investment than Dongguan Tarry. But when comparing it to its historical volatility, Agricultural Bank of is 2.76 times less risky than Dongguan Tarry. It trades about 0.02 of its potential returns per unit of risk. Dongguan Tarry Electronics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,285 in Dongguan Tarry Electronics on November 8, 2024 and sell it today you would earn a total of 814.00 from holding Dongguan Tarry Electronics or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Agricultural Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Dongguan Tarry Elect |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Agricultural Bank and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Dongguan Tarry
The main advantage of trading using opposite Agricultural Bank and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.The idea behind Agricultural Bank of and Dongguan Tarry Electronics 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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