Correlation Between Agricultural Bank and Jiangxi Lianchuang
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By analyzing existing cross correlation between Agricultural Bank of and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Agricultural Bank and Jiangxi Lianchuang 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 Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Jiangxi Lianchuang.
Diversification Opportunities for Agricultural Bank and Jiangxi Lianchuang
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agricultural and Jiangxi is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto 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 Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Agricultural Bank and Jiangxi Lianchuang
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 2.13 times less return on investment than Jiangxi Lianchuang. But when comparing it to its historical volatility, Agricultural Bank of is 2.71 times less risky than Jiangxi Lianchuang. It trades about 0.08 of its potential returns per unit of risk. Jiangxi Lianchuang Opto electronic is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,680 in Jiangxi Lianchuang Opto electronic on November 3, 2024 and sell it today you would earn a total of 128.00 from holding Jiangxi Lianchuang Opto electronic or generate 2.74% 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. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Agricultural Bank |
| Jiangxi Lianchuang Opto |
Agricultural Bank and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Jiangxi Lianchuang
The main advantage of trading using opposite Agricultural Bank and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.The idea behind Agricultural Bank of and Jiangxi Lianchuang Opto electronic 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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