Correlation Between AgriBank Securities and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both AgriBank Securities and Tienlen Steel 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 AgriBank Securities and Tienlen Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgriBank Securities JSC and Tienlen Steel Corp, you can compare the effects of market volatilities on AgriBank Securities and Tienlen Steel 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 AgriBank Securities with a short position of Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriBank Securities and Tienlen Steel.
Diversification Opportunities for AgriBank Securities and Tienlen Steel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AgriBank and Tienlen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AgriBank Securities JSC and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp and AgriBank Securities 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 AgriBank Securities JSC are associated (or correlated) with Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of AgriBank Securities i.e., AgriBank Securities and Tienlen Steel go up and down completely randomly.
Pair Corralation between AgriBank Securities and Tienlen Steel
Assuming the 90 days trading horizon AgriBank Securities JSC is expected to generate 1.1 times more return on investment than Tienlen Steel. However, AgriBank Securities is 1.1 times more volatile than Tienlen Steel Corp. It trades about 0.07 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.02 per unit of risk. If you would invest 782,119 in AgriBank Securities JSC on September 3, 2024 and sell it today you would earn a total of 927,881 from holding AgriBank Securities JSC or generate 118.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AgriBank Securities JSC vs. Tienlen Steel Corp
Performance |
| Timeline |
| AgriBank Securities JSC |
| Tienlen Steel Corp |
AgriBank Securities and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriBank Securities and Tienlen Steel
The main advantage of trading using opposite AgriBank Securities and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriBank Securities position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| AgriBank Securities vs. Bich Chi Food | AgriBank Securities vs. Petrovietnam Technical Services | AgriBank Securities vs. Sao Ta Foods | AgriBank Securities vs. Vietnam Technological And |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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