Correlation Between Agricultural Bank and Bomin Electronics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and Bomin Electronics 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 Bomin Electronics 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 Bomin Electronics Co, you can compare the effects of market volatilities on Agricultural Bank and Bomin Electronics 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 Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Bomin Electronics.

Diversification Opportunities for Agricultural Bank and Bomin Electronics

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Agricultural and Bomin is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics 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 Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Bomin Electronics go up and down completely randomly.

Pair Corralation between Agricultural Bank and Bomin Electronics

Assuming the 90 days trading horizon Agricultural Bank is expected to generate 2.99 times less return on investment than Bomin Electronics. But when comparing it to its historical volatility, Agricultural Bank of is 2.22 times less risky than Bomin Electronics. It trades about 0.14 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  664.00  in Bomin Electronics Co on September 13, 2024 and sell it today you would earn a total of  255.00  from holding Bomin Electronics Co or generate 38.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Agricultural Bank of  vs.  Bomin Electronics Co

 Performance 
       Timeline  
Agricultural Bank 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agricultural Bank sustained solid returns over the last few months and may actually be approaching a breakup point.
Bomin Electronics 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bomin Electronics Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bomin Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Agricultural Bank and Bomin Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agricultural Bank and Bomin Electronics

The main advantage of trading using opposite Agricultural Bank and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agricultural Bank position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.
The idea behind Agricultural Bank of and Bomin Electronics Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Transaction History
View history of all your transactions and understand their impact on performance