Correlation Between ALEFARM BREWING and Agricultural Bank
Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING and Agricultural Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ALEFARM BREWING and Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALEFARM BREWING DK 05 and Agricultural Bank of, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and Agricultural Bank.
Diversification Opportunities for ALEFARM BREWING and Agricultural Bank
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALEFARM and Agricultural is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and Agricultural Bank go up and down completely randomly.
Pair Corralation between ALEFARM BREWING and Agricultural Bank
Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the Agricultural Bank. But the stock apears to be less risky and, when comparing its historical volatility, ALEFARM BREWING DK 05 is 1.41 times less risky than Agricultural Bank. The stock trades about -0.04 of its potential returns per unit of risk. The Agricultural Bank of is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Agricultural Bank of on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Agricultural Bank of or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALEFARM BREWING DK 05 vs. Agricultural Bank of
Performance |
| Timeline |
| ALEFARM BREWING DK |
| Agricultural Bank |
ALEFARM BREWING and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALEFARM BREWING and Agricultural Bank
The main advantage of trading using opposite ALEFARM BREWING and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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.| ALEFARM BREWING vs. China Resources Beer | ALEFARM BREWING vs. MOLSON RS BEVERAGE | ALEFARM BREWING vs. Superior Plus Corp | ALEFARM BREWING vs. SIVERS SEMICONDUCTORS AB |
| Agricultural Bank vs. GEAR4MUSIC LS 10 | Agricultural Bank vs. Sterling Construction | Agricultural Bank vs. ALEFARM BREWING DK 05 | Agricultural Bank vs. Dairy Farm International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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