Correlation Between Agricultural Bank and Tianjin Silvery
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By analyzing existing cross correlation between Agricultural Bank of and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Agricultural Bank and Tianjin Silvery 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 Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Tianjin Silvery.
Diversification Opportunities for Agricultural Bank and Tianjin Silvery
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and Tianjin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon 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 Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Tianjin Silvery go up and down completely randomly.
Pair Corralation between Agricultural Bank and Tianjin Silvery
Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.52 times more return on investment than Tianjin Silvery. However, Agricultural Bank of is 1.92 times less risky than Tianjin Silvery. It trades about 0.11 of its potential returns per unit of risk. Tianjin Silvery Dragon is currently generating about 0.03 per unit of risk. If you would invest 274.00 in Agricultural Bank of on October 30, 2024 and sell it today you would earn a total of 242.00 from holding Agricultural Bank of or generate 88.32% 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. Tianjin Silvery Dragon
Performance |
| Timeline |
| Agricultural Bank |
| Tianjin Silvery Dragon |
Agricultural Bank and Tianjin Silvery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and Tianjin Silvery
The main advantage of trading using opposite Agricultural Bank and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Tianjin Silvery 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 Tianjin Silvery will offset losses from the drop in Tianjin Silvery's long position.The idea behind Agricultural Bank of and Tianjin Silvery Dragon 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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