Correlation Between Agricultural Bank and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Agricultural Bank and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and International Consolidated.
Diversification Opportunities for Agricultural Bank and International Consolidated
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agricultural and International is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and International Consolidated go up and down completely randomly.
Pair Corralation between Agricultural Bank and International Consolidated
Assuming the 90 days horizon Agricultural Bank of is expected to generate 4.41 times more return on investment than International Consolidated. However, Agricultural Bank is 4.41 times more volatile than International Consolidated Airlines. It trades about 0.1 of its potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.13 per unit of risk. If you would invest 12.00 in Agricultural Bank of on September 12, 2024 and sell it today you would earn a total of 39.00 from holding Agricultural Bank of or generate 325.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agricultural Bank of vs. International Consolidated Air
Performance |
| Timeline |
| Agricultural Bank |
| International Consolidated |
Agricultural Bank and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agricultural Bank and International Consolidated
The main advantage of trading using opposite Agricultural Bank and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Agricultural Bank vs. GEAR4MUSIC LS 10 | Agricultural Bank vs. Sterling Construction | Agricultural Bank vs. ALEFARM BREWING DK 05 | Agricultural Bank vs. Dairy Farm International |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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