Correlation Between Agricultural Bank and Hunan Tyen
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By analyzing existing cross correlation between Agricultural Bank of and Hunan Tyen Machinery, you can compare the effects of market volatilities on Agricultural Bank and Hunan Tyen 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 Hunan Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Hunan Tyen.
Diversification Opportunities for Agricultural Bank and Hunan Tyen
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agricultural and Hunan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery 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 Hunan Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Hunan Tyen go up and down completely randomly.
Pair Corralation between Agricultural Bank and Hunan Tyen
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 1.55 times less return on investment than Hunan Tyen. But when comparing it to its historical volatility, Agricultural Bank of is 3.03 times less risky than Hunan Tyen. It trades about 0.08 of its potential returns per unit of risk. Hunan Tyen Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Hunan Tyen Machinery on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Hunan Tyen Machinery or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. Hunan Tyen Machinery
Performance |
| Timeline |
| Agricultural Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Hunan Tyen Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Agricultural Bank and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Hunan Tyen
The main advantage of trading using opposite Agricultural Bank and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Hunan Tyen 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 Hunan Tyen will offset losses from the drop in Hunan Tyen's long position.The idea behind Agricultural Bank of and Hunan Tyen Machinery 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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