Correlation Between Golden Bridge and Cho Bi
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and Cho Bi 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 Golden Bridge and Cho Bi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Bridge Investment and Cho Bi, you can compare the effects of market volatilities on Golden Bridge and Cho Bi 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 Golden Bridge with a short position of Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and Cho Bi.
Diversification Opportunities for Golden Bridge and Cho Bi
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Cho is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and Cho Bi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi and Golden Bridge 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 Golden Bridge Investment are associated (or correlated) with Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of Golden Bridge i.e., Golden Bridge and Cho Bi go up and down completely randomly.
Pair Corralation between Golden Bridge and Cho Bi
Assuming the 90 days trading horizon Golden Bridge Investment is expected to generate 0.77 times more return on investment than Cho Bi. However, Golden Bridge Investment is 1.29 times less risky than Cho Bi. It trades about -0.15 of its potential returns per unit of risk. Cho Bi is currently generating about -0.24 per unit of risk. If you would invest 42,900 in Golden Bridge Investment on November 28, 2024 and sell it today you would lose (1,300) from holding Golden Bridge Investment or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. Cho Bi
Performance |
| Timeline |
| Golden Bridge Investment |
| Cho Bi |
Golden Bridge and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and Cho Bi
The main advantage of trading using opposite Golden Bridge and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.| Golden Bridge vs. Kyung In Synthetic Corp | Golden Bridge vs. Kukdo Chemical Co | Golden Bridge vs. KPX Green Chemical | Golden Bridge vs. Aprogen Healthcare Games |
| Cho Bi vs. Samsung Electronics Co | Cho Bi vs. Samsung Electronics Co | Cho Bi vs. LG Energy Solution | Cho Bi vs. SK Hynix |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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