Correlation Between China Railway and Agricultural Bank
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By analyzing existing cross correlation between China Railway Construction and Agricultural Bank of, you can compare the effects of market volatilities on China Railway 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 Railway with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Agricultural Bank.
Diversification Opportunities for China Railway and Agricultural Bank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Agricultural is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction 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 Railway 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 Railway Construction 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 Railway i.e., China Railway and Agricultural Bank go up and down completely randomly.
Pair Corralation between China Railway and Agricultural Bank
Assuming the 90 days trading horizon China Railway is expected to generate 2.9 times less return on investment than Agricultural Bank. In addition to that, China Railway is 1.44 times more volatile than Agricultural Bank of. It trades about 0.02 of its total potential returns per unit of risk. Agricultural Bank of is currently generating about 0.1 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Agricultural Bank of
Performance |
| Timeline |
| China Railway Constr |
| Agricultural Bank |
China Railway and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Agricultural Bank
The main advantage of trading using opposite China Railway and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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 Railway vs. Agricultural Bank of | China Railway vs. Industrial and Commercial | China Railway vs. Bank of China | China Railway vs. PetroChina Co Ltd |
| Agricultural Bank vs. China Petroleum Chemical | Agricultural Bank vs. PetroChina Co Ltd | Agricultural Bank vs. China Mobile Limited | Agricultural Bank vs. Industrial and Commercial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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