Correlation Between Duzhe Publishing and Agricultural Bank

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

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

Diversification Opportunities for Duzhe Publishing and Agricultural Bank

0.28

Correlation Coefficient

Duzhe Publishing  Agricultural Bank

Modest diversification

The 3 months correlation between Duzhe and Agricultural is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Duzhe Publishing 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 Duzhe Publishing 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 Duzhe Publishing 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 Duzhe Publishing i.e., Duzhe Publishing and Agricultural Bank go up and down completely randomly.

Pair Corralation between Duzhe Publishing and Agricultural Bank

Assuming the 90 days trading horizon Duzhe Publishing is expected to generate 2.94 times less return on investment than Agricultural Bank. In addition to that, Duzhe Publishing is 2.36 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 0.11 per unit of volatility. If you would invest  274.00  in Agricultural Bank of on October 12, 2024 and sell it today you would earn a total of  240.00  from holding Agricultural Bank of or generate 87.59% return on investment over 90 days.

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

Duzhe Publishing Media  vs.  Agricultural Bank of

Duzhe Publishing Media

Risk-Adjusted Performance

2 of 100

Weak

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

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 Duzhe Publishing and Agricultural Bank

The main advantage of trading using opposite Duzhe Publishing and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duzhe Publishing 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 Duzhe Publishing 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.