Correlation Between Agricultural Bank and DIeteren Group
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and DIeteren Group 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 Agricultural Bank and DIeteren Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agricultural Bank of and DIeteren Group SA, you can compare the effects of market volatilities on Agricultural Bank and DIeteren Group 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 Agricultural Bank with a short position of DIeteren Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and DIeteren Group.
Diversification Opportunities for Agricultural Bank and DIeteren Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and DIeteren is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and DIeteren Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIeteren Group SA and Agricultural Bank 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 Agricultural Bank of are associated (or correlated) with DIeteren Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIeteren Group SA has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and DIeteren Group go up and down completely randomly.
Pair Corralation between Agricultural Bank and DIeteren Group
Assuming the 90 days horizon Agricultural Bank of is expected to generate 8.19 times more return on investment than DIeteren Group. However, Agricultural Bank is 8.19 times more volatile than DIeteren Group SA. It trades about 0.2 of its potential returns per unit of risk. DIeteren Group SA is currently generating about -0.17 per unit of risk. If you would invest 41.00 in Agricultural Bank of on October 29, 2024 and sell it today you would earn a total of 10.00 from holding Agricultural Bank of or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. DIeteren Group SA
Performance |
| Timeline |
| Agricultural Bank |
| DIeteren Group SA |
Agricultural Bank and DIeteren Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and DIeteren Group
The main advantage of trading using opposite Agricultural Bank and DIeteren Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, DIeteren Group 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 DIeteren Group will offset losses from the drop in DIeteren Group's long position.| Agricultural Bank vs. alstria office REIT AG | Agricultural Bank vs. New Residential Investment | Agricultural Bank vs. Air Lease | Agricultural Bank vs. ALBIS LEASING AG |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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