Correlation Between AGRICUL BK and RWE AG
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and RWE AG 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 RWE AG 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 RWE AG, you can compare the effects of market volatilities on AGRICUL BK and RWE AG 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 RWE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and RWE AG.
Diversification Opportunities for AGRICUL BK and RWE AG
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AGRICUL and RWE is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and RWE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWE AG 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 RWE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWE AG has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and RWE AG go up and down completely randomly.
Pair Corralation between AGRICUL BK and RWE AG
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 1.41 times less return on investment than RWE AG. In addition to that, AGRICUL BK is 1.12 times more volatile than RWE AG. It trades about 0.11 of its total potential returns per unit of risk. RWE AG is currently generating about 0.17 per unit of volatility. If you would invest 2,977 in RWE AG on September 1, 2024 and sell it today you would earn a total of 201.00 from holding RWE AG or generate 6.75% 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. RWE AG
Performance |
| Timeline |
| AGRICUL BK CHINA |
| RWE AG |
AGRICUL BK and RWE AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and RWE AG
The main advantage of trading using opposite AGRICUL BK and RWE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, RWE AG 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 RWE AG will offset losses from the drop in RWE AG's long position.| AGRICUL BK vs. BE Semiconductor Industries | AGRICUL BK vs. NXP Semiconductors NV | AGRICUL BK vs. Luckin Coffee | AGRICUL BK vs. ELMOS SEMICONDUCTOR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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