Correlation Between Agricultural Bank and China Longyuan
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By analyzing existing cross correlation between Agricultural Bank of and China Longyuan Power, you can compare the effects of market volatilities on Agricultural Bank and China Longyuan 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 China Longyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and China Longyuan.
Diversification Opportunities for Agricultural Bank and China Longyuan
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Agricultural and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and China Longyuan Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Longyuan Power 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 China Longyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Longyuan Power has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and China Longyuan go up and down completely randomly.
Pair Corralation between Agricultural Bank and China Longyuan
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 3.66 times less return on investment than China Longyuan. But when comparing it to its historical volatility, Agricultural Bank of is 2.23 times less risky than China Longyuan. It trades about 0.07 of its potential returns per unit of risk. China Longyuan Power is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,437 in China Longyuan Power on September 24, 2024 and sell it today you would earn a total of 269.00 from holding China Longyuan Power or generate 18.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Agricultural Bank of vs. China Longyuan Power
Performance |
Timeline |
Agricultural Bank |
China Longyuan Power |
Agricultural Bank and China Longyuan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agricultural Bank and China Longyuan
The main advantage of trading using opposite Agricultural Bank and China Longyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, China Longyuan 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 China Longyuan will offset losses from the drop in China Longyuan's long position.Agricultural Bank vs. Guocheng Mining Co | Agricultural Bank vs. Sino Platinum Metals Co | Agricultural Bank vs. Guangdong Jinma Entertainment | Agricultural Bank vs. Shenyang Huitian Thermal |
China Longyuan vs. Industrial and Commercial | China Longyuan vs. Agricultural Bank of | China Longyuan vs. China Construction Bank | China Longyuan vs. Bank of China |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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