Correlation Between Agricultural Bank and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and GEAR4MUSIC 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Agricultural Bank and GEAR4MUSIC 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 GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and GEAR4MUSIC.
Diversification Opportunities for Agricultural Bank and GEAR4MUSIC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agricultural and GEAR4MUSIC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 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 GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between Agricultural Bank and GEAR4MUSIC
Assuming the 90 days horizon Agricultural Bank of is expected to generate 3.58 times more return on investment than GEAR4MUSIC. However, Agricultural Bank is 3.58 times more volatile than GEAR4MUSIC LS 10. It trades about 0.09 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about -0.01 per unit of risk. If you would invest 38.00 in Agricultural Bank of on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Agricultural Bank of or generate 28.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Agricultural Bank of vs. GEAR4MUSIC LS 10
Performance |
Timeline |
Agricultural Bank |
GEAR4MUSIC LS 10 |
Agricultural Bank and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agricultural Bank and GEAR4MUSIC
The main advantage of trading using opposite Agricultural Bank and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.Agricultural Bank vs. Commonwealth Bank of | Agricultural Bank vs. Superior Plus Corp | Agricultural Bank vs. SIVERS SEMICONDUCTORS AB | Agricultural Bank vs. CHINA HUARONG ENERHD 50 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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