Correlation Between China Everbright and Agricultural Bank
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By analyzing existing cross correlation between China Everbright Bank and Agricultural Bank of, you can compare the effects of market volatilities on China Everbright and Agricultural Bank 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 China Everbright with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Everbright and Agricultural Bank.
Diversification Opportunities for China Everbright and Agricultural Bank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Agricultural is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China Everbright Bank and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and China Everbright 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 China Everbright Bank are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of China Everbright i.e., China Everbright and Agricultural Bank go up and down completely randomly.
Pair Corralation between China Everbright and Agricultural Bank
Assuming the 90 days trading horizon China Everbright Bank is expected to generate 1.16 times more return on investment than Agricultural Bank. However, China Everbright is 1.16 times more volatile than Agricultural Bank of. It trades about 0.08 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.04 per unit of risk. If you would invest 342.00 in China Everbright Bank on October 25, 2024 and sell it today you would earn a total of 23.00 from holding China Everbright Bank or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Everbright Bank vs. Agricultural Bank of
Performance |
| Timeline |
| China Everbright Bank |
| Agricultural Bank |
China Everbright and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Everbright and Agricultural Bank
The main advantage of trading using opposite China Everbright and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Everbright position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.| China Everbright vs. Nanjing Putian Telecommunications | China Everbright vs. Everdisplay Optronics Shanghai | China Everbright vs. Dymatic Chemicals | China Everbright vs. Allwin Telecommunication Co |
| Agricultural Bank vs. Bank of China | Agricultural Bank vs. Kweichow Moutai Co | Agricultural Bank vs. PetroChina Co Ltd | Agricultural Bank vs. Bank of Communications |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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