Correlation Between Agricultural Bank and China Railway
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By analyzing existing cross correlation between Agricultural Bank of and China Railway Group, you can compare the effects of market volatilities on Agricultural Bank and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and China Railway.
Diversification Opportunities for Agricultural Bank and China Railway
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and China is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and China Railway go up and down completely randomly.
Pair Corralation between Agricultural Bank and China Railway
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.64 times more return on investment than China Railway. However, Agricultural Bank of is 1.56 times less risky than China Railway. It trades about 0.09 of its potential returns per unit of risk. China Railway Group is currently generating about 0.04 per unit of risk. If you would invest 363.00 in Agricultural Bank of on August 25, 2024 and sell it today you would earn a total of 107.00 from holding Agricultural Bank of or generate 29.48% 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. China Railway Group
Performance |
| Timeline |
| Agricultural Bank |
| China Railway Group |
Agricultural Bank and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and China Railway
The main advantage of trading using opposite Agricultural Bank and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Agricultural Bank vs. Road Environment Technology | Agricultural Bank vs. Anhui Deli Household | Agricultural Bank vs. Jiangsu Broadcasting Cable | Agricultural Bank vs. Chahua Modern Housewares |
| China Railway vs. Winner Medical Co | China Railway vs. Hengkang Medical Group | China Railway vs. Lander Sports Development | China Railway vs. Shuhua Sports Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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