Correlation Between AGRICUL BK and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha 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 Bayer Aktiengesellschaft, you can compare the effects of market volatilities on AGRICUL BK and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Bayer Aktiengesellscha.
Diversification Opportunities for AGRICUL BK and Bayer Aktiengesellscha
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGRICUL and Bayer is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft 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 Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between AGRICUL BK and Bayer Aktiengesellscha
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 2.0 times more return on investment than Bayer Aktiengesellscha. However, AGRICUL BK is 2.0 times more volatile than Bayer Aktiengesellschaft. It trades about 0.09 of its potential returns per unit of risk. Bayer Aktiengesellschaft is currently generating about -0.02 per unit of risk. If you would invest 13.00 in AGRICUL BK CHINA H on August 25, 2024 and sell it today you would earn a total of 33.00 from holding AGRICUL BK CHINA H or generate 253.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Bayer Aktiengesellschaft |
AGRICUL BK and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Bayer Aktiengesellscha
The main advantage of trading using opposite AGRICUL BK and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, Bayer Aktiengesellscha 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 Bayer Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha'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 |
| Bayer Aktiengesellscha vs. Johnson Johnson | Bayer Aktiengesellscha vs. Merck Co | Bayer Aktiengesellscha vs. Roche Holding Ltd | Bayer Aktiengesellscha vs. Amgen Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |