Correlation Between AGRICUL BK and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on AGRICUL BK and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Thyssenkrupp.
Diversification Opportunities for AGRICUL BK and Thyssenkrupp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICUL and Thyssenkrupp is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Thyssenkrupp go up and down completely randomly.
Pair Corralation between AGRICUL BK and Thyssenkrupp
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 3.4 times more return on investment than Thyssenkrupp. However, AGRICUL BK is 3.4 times more volatile than thyssenkrupp AG. It trades about 0.09 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about -0.07 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. thyssenkrupp AG
Performance |
| Timeline |
| AGRICUL BK CHINA |
| thyssenkrupp AG |
AGRICUL BK and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Thyssenkrupp
The main advantage of trading using opposite AGRICUL BK and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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