Correlation Between Agricultural Bank and Huitong Construction
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By analyzing existing cross correlation between Agricultural Bank of and Huitong Construction Group, you can compare the effects of market volatilities on Agricultural Bank and Huitong Construction 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 Huitong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Huitong Construction.
Diversification Opportunities for Agricultural Bank and Huitong Construction
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Huitong is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Huitong Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huitong Construction 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 Huitong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huitong Construction has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Huitong Construction go up and down completely randomly.
Pair Corralation between Agricultural Bank and Huitong Construction
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.44 times more return on investment than Huitong Construction. However, Agricultural Bank of is 2.28 times less risky than Huitong Construction. It trades about 0.1 of its potential returns per unit of risk. Huitong Construction Group is currently generating about -0.01 per unit of risk. If you would invest 343.00 in Agricultural Bank of on September 12, 2024 and sell it today you would earn a total of 162.00 from holding Agricultural Bank of or generate 47.23% 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. Huitong Construction Group
Performance |
| Timeline |
| Agricultural Bank |
| Huitong Construction |
Agricultural Bank and Huitong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Huitong Construction
The main advantage of trading using opposite Agricultural Bank and Huitong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Huitong Construction 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 Huitong Construction will offset losses from the drop in Huitong Construction's long position.| Agricultural Bank vs. China Petroleum Chemical | Agricultural Bank vs. PetroChina Co Ltd | Agricultural Bank vs. China Mobile Limited | Agricultural Bank vs. Industrial and Commercial |
| Huitong Construction vs. Agricultural Bank of | Huitong Construction vs. Shanghai CEO Environmental | Huitong Construction vs. JCHX Mining Management | Huitong Construction vs. Jiangsu Financial Leasing |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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