Correlation Between Guotai Junan and Agricultural Bank

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

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

Diversification Opportunities for Guotai Junan and Agricultural Bank

0.0

Correlation Coefficient

Guotai Junan  Agricultural Bank

Pay attention - limited upside

The 3 months correlation between Guotai and Agricultural is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guotai Junan Securities and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Guotai Junan 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 Guotai Junan Securities 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 Guotai Junan i.e., Guotai Junan and Agricultural Bank go up and down completely randomly.

Pair Corralation between Guotai Junan and Agricultural Bank

If you would invest  273.00  in Agricultural Bank of on October 25, 2024 and sell it today you would earn a total of  220.00  from holding Agricultural Bank of or generate 80.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Guotai Junan Securities  vs.  Agricultural Bank of

Guotai Junan Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guotai Junan Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guotai Junan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Agricultural Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 2 (%) 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.

Pair Trading with Guotai Junan and Agricultural Bank

The main advantage of trading using opposite Guotai Junan and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guotai Junan 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 Guotai Junan Securities 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.