Correlation Between AGRICULTBK HADR/25 and Global Fashion
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 and Global Fashion 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 AGRICULTBK HADR/25 and Global Fashion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and Global Fashion Group, you can compare the effects of market volatilities on AGRICULTBK HADR/25 and Global Fashion 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 AGRICULTBK HADR/25 with a short position of Global Fashion. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and Global Fashion.
Diversification Opportunities for AGRICULTBK HADR/25 and Global Fashion
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICULTBK and Global is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and Global Fashion Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fashion Group and AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC are associated (or correlated) with Global Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fashion Group has no effect on the direction of AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and Global Fashion go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and Global Fashion
Assuming the 90 days trading horizon AGRICULTBK HADR/25 is expected to generate 1.75 times less return on investment than Global Fashion. But when comparing it to its historical volatility, AGRICULTBK HADR25 YC is 2.59 times less risky than Global Fashion. It trades about 0.07 of its potential returns per unit of risk. Global Fashion Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Global Fashion Group on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Global Fashion Group or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. Global Fashion Group
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| Global Fashion Group |
AGRICULTBK HADR/25 and Global Fashion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and Global Fashion
The main advantage of trading using opposite AGRICULTBK HADR/25 and Global Fashion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 position performs unexpectedly, Global Fashion 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 Global Fashion will offset losses from the drop in Global Fashion's long position.| AGRICULTBK HADR/25 vs. CHINA BANK ADR20 | AGRICULTBK HADR/25 vs. COMMONWBK AUSTRSPADRS | AGRICULTBK HADR/25 vs. The Toronto Dominion Bank | AGRICULTBK HADR/25 vs. Bank of Montreal |
| Global Fashion vs. Marie Brizard Wine | Global Fashion vs. MTI WIRELESS EDGE | Global Fashion vs. BRIT AMER TOBACCO | Global Fashion vs. IMPERIAL TOBACCO |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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