Correlation Between Huayi Brothers and Agricultural Bank

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Can any of the company-specific risk be diversified away by investing in both Huayi Brothers 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 Huayi Brothers and Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huayi Brothers Media and Agricultural Bank of, you can compare the effects of market volatilities on Huayi Brothers 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 Huayi Brothers with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huayi Brothers and Agricultural Bank.

Diversification Opportunities for Huayi Brothers and Agricultural Bank

HuayiAgriculturalDiversified AwayHuayiAgriculturalDiversified Away100%
-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Huayi and Agricultural is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Huayi Brothers 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 Huayi Brothers 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 Huayi Brothers 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 Huayi Brothers i.e., Huayi Brothers and Agricultural Bank go up and down completely randomly.

Pair Corralation between Huayi Brothers and Agricultural Bank

Assuming the 90 days trading horizon Huayi Brothers Media is expected to under-perform the Agricultural Bank. In addition to that, Huayi Brothers is 3.27 times more volatile than Agricultural Bank of. It trades about -0.02 of its total potential returns per unit of risk. Agricultural Bank of is currently generating about 0.06 per unit of volatility. If you would invest  484.00  in Agricultural Bank of on October 21, 2024 and sell it today you would earn a total of  21.00  from holding Agricultural Bank of or generate 4.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Huayi Brothers Media  vs.  Agricultural Bank of

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.15300027 601288
       Timeline  
Huayi Brothers Media 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Huayi Brothers Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Huayi Brothers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2.42.62.833.23.43.63.8
Agricultural Bank 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Agricultural Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4.74.84.955.15.25.35.4

Huayi Brothers and Agricultural Bank Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.0-8.98-5.97-2.960.02.976.09.0212.04 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15300027 601288
       Returns  

Pair Trading with Huayi Brothers and Agricultural Bank

The main advantage of trading using opposite Huayi Brothers and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huayi Brothers 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 Huayi Brothers 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.
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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