Correlation Between Agricultural Bank and Goodwill E

Can any of the company-specific risk be diversified away by investing in both Agricultural Bank and Goodwill E 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 Goodwill E 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 Goodwill E Health, you can compare the effects of market volatilities on Agricultural Bank and Goodwill E 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 Goodwill E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agricultural Bank and Goodwill E.

Diversification Opportunities for Agricultural Bank and Goodwill E

-0.13

Correlation Coefficient

Agricultural Bank  Goodwill E

Good diversification

The 3 months correlation between Agricultural and Goodwill is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Agricultural Bank of and Goodwill E Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodwill E Health 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 Goodwill E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodwill E Health has no effect on the direction of Agricultural Bank i.e., Agricultural Bank and Goodwill E go up and down completely randomly.

Pair Corralation between Agricultural Bank and Goodwill E

Assuming the 90 days trading horizon Agricultural Bank of is expected to generate 0.4 times more return on investment than Goodwill E. However, Agricultural Bank of is 2.49 times less risky than Goodwill E. It trades about 0.44 of its potential returns per unit of risk. Goodwill E Health is currently generating about -0.36 per unit of risk. If you would invest  482.00  in Agricultural Bank of on October 2, 2024 and sell it today you would earn a total of  52.00  from holding Agricultural Bank of or generate 10.79% 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.  Goodwill E Health

Agricultural Bank

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agricultural Bank of are ranked lower than 12 (%) 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 January 2025.

Goodwill E Health

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goodwill E Health are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Goodwill E may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Agricultural Bank and Goodwill E

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

The idea behind Agricultural Bank of and Goodwill E Health 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.