Correlation Between Agricultural Bank and DR
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By analyzing existing cross correlation between Agricultural Bank of and DR Limited, you can compare the effects of market volatilities on Agricultural Bank and DR 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 DR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and DR.
Diversification Opportunities for Agricultural Bank and DR
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agricultural and DR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and DR Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DR Limited 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 DR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DR Limited has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and DR go up and down completely randomly.
Pair Corralation between Agricultural Bank and DR
Assuming the 90 days trading horizon Agricultural Bank is expected to generate 6.16 times less return on investment than DR. But when comparing it to its historical volatility, Agricultural Bank of is 2.64 times less risky than DR. It trades about 0.07 of its potential returns per unit of risk. DR Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,848 in DR Limited on September 24, 2024 and sell it today you would earn a total of 638.00 from holding DR Limited or generate 34.52% 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. DR Limited
Performance |
Timeline |
Agricultural Bank |
DR Limited |
Agricultural Bank and DR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agricultural Bank and DR
The main advantage of trading using opposite Agricultural Bank and DR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, DR 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 DR will offset losses from the drop in DR'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 |
DR vs. Agricultural Bank of | DR vs. Industrial and Commercial | DR vs. Bank of China | DR vs. China Construction Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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