Correlation Between AGRICUL BK and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and Nine Dragons 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 Nine Dragons 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 Nine Dragons Paper, you can compare the effects of market volatilities on AGRICUL BK and Nine Dragons 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 Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Nine Dragons.
Diversification Opportunities for AGRICUL BK and Nine Dragons
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGRICUL and Nine is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper 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 Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Nine Dragons go up and down completely randomly.
Pair Corralation between AGRICUL BK and Nine Dragons
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 1.1 times less return on investment than Nine Dragons. But when comparing it to its historical volatility, AGRICUL BK CHINA H is 1.05 times less risky than Nine Dragons. It trades about 0.01 of its potential returns per unit of risk. Nine Dragons Paper is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Nine Dragons Paper on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Nine Dragons Paper or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Nine Dragons Paper
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Nine Dragons Paper |
AGRICUL BK and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Nine Dragons
The main advantage of trading using opposite AGRICUL BK and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.| AGRICUL BK vs. ACCSYS TECHPLC EO | AGRICUL BK vs. Wyndham Hotels Resorts | AGRICUL BK vs. FARO Technologies | AGRICUL BK vs. MHP Hotel AG |
| Nine Dragons vs. China Communications Services | Nine Dragons vs. COMBA TELECOM SYST | Nine Dragons vs. FARO Technologies | Nine Dragons vs. Canadian Utilities Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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