Correlation Between AGRICULTURAL DEVELOPMENT and TRUST BANK
Can any of the company-specific risk be diversified away by investing in both AGRICULTURAL DEVELOPMENT and TRUST 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 AGRICULTURAL DEVELOPMENT and TRUST BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTURAL DEVELOPMENT BANK and TRUST BANK LIMITED, you can compare the effects of market volatilities on AGRICULTURAL DEVELOPMENT and TRUST 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 AGRICULTURAL DEVELOPMENT with a short position of TRUST BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTURAL DEVELOPMENT and TRUST BANK.
Diversification Opportunities for AGRICULTURAL DEVELOPMENT and TRUST BANK
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AGRICULTURAL and TRUST is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTURAL DEVELOPMENT BANK and TRUST BANK LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRUST BANK LIMITED and AGRICULTURAL DEVELOPMENT 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 DEVELOPMENT BANK are associated (or correlated) with TRUST BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRUST BANK LIMITED has no effect on the direction of AGRICULTURAL DEVELOPMENT i.e., AGRICULTURAL DEVELOPMENT and TRUST BANK go up and down completely randomly.
Pair Corralation between AGRICULTURAL DEVELOPMENT and TRUST BANK
If you would invest 82.00 in TRUST BANK LIMITED on September 2, 2024 and sell it today you would earn a total of 1.00 from holding TRUST BANK LIMITED or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTURAL DEVELOPMENT BANK vs. TRUST BANK LIMITED
Performance |
| Timeline |
| AGRICULTURAL DEVELOPMENT |
| TRUST BANK LIMITED |
AGRICULTURAL DEVELOPMENT and TRUST BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTURAL DEVELOPMENT and TRUST BANK
The main advantage of trading using opposite AGRICULTURAL DEVELOPMENT and TRUST BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTURAL DEVELOPMENT position performs unexpectedly, TRUST 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 TRUST BANK will offset losses from the drop in TRUST BANK's long position.The idea behind AGRICULTURAL DEVELOPMENT BANK and TRUST BANK LIMITED 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.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |