Correlation Between Oriental Times and Agricultural Bank

Can any of the company-specific risk be diversified away by investing in both Oriental Times and Agricultural Bank 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 Oriental Times and Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oriental Times Media and Agricultural Bank of, you can compare the effects of market volatilities on Oriental Times and Agricultural Bank 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 Oriental Times with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Times and Agricultural Bank.

Diversification Opportunities for Oriental Times and Agricultural Bank

0.24

Correlation Coefficient

Oriental Times  Agricultural Bank

Modest diversification

The 3 months correlation between Oriental and Agricultural is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Times Media and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Oriental Times 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 Oriental Times Media are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Oriental Times i.e., Oriental Times and Agricultural Bank go up and down completely randomly.

Pair Corralation between Oriental Times and Agricultural Bank

Assuming the 90 days trading horizon Oriental Times Media is expected to generate 2.9 times more return on investment than Agricultural Bank. However, Oriental Times is 2.9 times more volatile than Agricultural Bank of. It trades about 0.04 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.1 per unit of risk. If you would invest  343.00  in Oriental Times Media on December 2, 2024 and sell it today you would earn a total of  196.00  from holding Oriental Times Media or generate 57.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Oriental Times Media  vs.  Agricultural Bank of

Oriental Times Media

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Times Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oriental Times sustained solid returns over the last few months and may actually be approaching a breakup point.

Agricultural Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agricultural Bank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Oriental Times and Agricultural Bank

The main advantage of trading using opposite Oriental Times and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Times position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.

The idea behind Oriental Times Media and Agricultural Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.