Correlation Between Agricultural Bank and Bank of Changsha
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By analyzing existing cross correlation between Agricultural Bank of and Bank of Changsha, you can compare the effects of market volatilities on Agricultural Bank and Bank of Changsha 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 Bank of Changsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Bank of Changsha.
Diversification Opportunities for Agricultural Bank and Bank of Changsha
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Bank is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Bank of Changsha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Changsha 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 Bank of Changsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Changsha has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Bank of Changsha go up and down completely randomly.
Pair Corralation between Agricultural Bank and Bank of Changsha
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.7 times more return on investment than Bank of Changsha. However, Agricultural Bank of is 1.42 times less risky than Bank of Changsha. It trades about 0.37 of its potential returns per unit of risk. Bank of Changsha is currently generating about 0.14 per unit of risk. If you would invest 466.00 in Agricultural Bank of on September 14, 2024 and sell it today you would earn a total of 37.00 from holding Agricultural Bank of or generate 7.94% 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. Bank of Changsha
Performance |
| Timeline |
| Agricultural Bank |
| Bank of Changsha |
Agricultural Bank and Bank of Changsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Bank of Changsha
The main advantage of trading using opposite Agricultural Bank and Bank of Changsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Bank of Changsha 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 Bank of Changsha will offset losses from the drop in Bank of Changsha's long position.| Agricultural Bank vs. Industrial and Commercial | Agricultural Bank vs. China Construction Bank | Agricultural Bank vs. Bank of China | Agricultural Bank vs. PetroChina Co Ltd |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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