Correlation Between AGRICUL BK and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and INVITATION HOMES 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 AGRICUL BK and INVITATION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and INVITATION HOMES DL, you can compare the effects of market volatilities on AGRICUL BK and INVITATION HOMES 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 AGRICUL BK with a short position of INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and INVITATION HOMES.
Diversification Opportunities for AGRICUL BK and INVITATION HOMES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGRICUL and INVITATION is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES and AGRICUL BK 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 AGRICUL BK CHINA H are associated (or correlated) with INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and INVITATION HOMES go up and down completely randomly.
Pair Corralation between AGRICUL BK and INVITATION HOMES
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 1.57 times more return on investment than INVITATION HOMES. However, AGRICUL BK is 1.57 times more volatile than INVITATION HOMES DL. It trades about 0.08 of its potential returns per unit of risk. INVITATION HOMES DL is currently generating about 0.02 per unit of risk. If you would invest 41.00 in AGRICUL BK CHINA H on August 25, 2024 and sell it today you would earn a total of 5.00 from holding AGRICUL BK CHINA H or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. INVITATION HOMES DL
Performance |
| Timeline |
| AGRICUL BK CHINA |
| INVITATION HOMES |
AGRICUL BK and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and INVITATION HOMES
The main advantage of trading using opposite AGRICUL BK and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.| AGRICUL BK vs. Strategic Investments AS | AGRICUL BK vs. Apollo Investment Corp | AGRICUL BK vs. REGAL ASIAN INVESTMENTS | AGRICUL BK vs. HK Electric Investments |
| INVITATION HOMES vs. Fast Retailing Co | INVITATION HOMES vs. Verizon Communications | INVITATION HOMES vs. Iridium Communications | INVITATION HOMES vs. China Communications Services |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |