Correlation Between AGRICUL BK and Companhia
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and Companhia 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 Companhia 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 Companhia de Saneamento, you can compare the effects of market volatilities on AGRICUL BK and Companhia 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 Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Companhia.
Diversification Opportunities for AGRICUL BK and Companhia
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGRICUL and Companhia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Companhia de Saneamento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Saneamento 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 Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Saneamento has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Companhia go up and down completely randomly.
Pair Corralation between AGRICUL BK and Companhia
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 4.69 times more return on investment than Companhia. However, AGRICUL BK is 4.69 times more volatile than Companhia de Saneamento. It trades about 0.09 of its potential returns per unit of risk. Companhia de Saneamento is currently generating about 0.04 per unit of risk. If you would invest 14.00 in AGRICUL BK CHINA H on August 29, 2024 and sell it today you would earn a total of 32.00 from holding AGRICUL BK CHINA H or generate 228.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Companhia de Saneamento
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Companhia de Saneamento |
AGRICUL BK and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Companhia
The main advantage of trading using opposite AGRICUL BK and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.| AGRICUL BK vs. Monster Beverage Corp | AGRICUL BK vs. ALGOMA STEEL GROUP | AGRICUL BK vs. ABO GROUP ENVIRONMENT | AGRICUL BK vs. RELIANCE STEEL AL |
| Companhia vs. KINGBOARD CHEMICAL | Companhia vs. CHEMICAL INDUSTRIES | Companhia vs. ASURE SOFTWARE | Companhia vs. Sanyo Chemical Industries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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