Correlation Between Golden Bridge and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on Golden Bridge and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and KMH Hitech.
Diversification Opportunities for Golden Bridge and KMH Hitech
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and KMH is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Golden Bridge i.e., Golden Bridge and KMH Hitech go up and down completely randomly.
Pair Corralation between Golden Bridge and KMH Hitech
Assuming the 90 days trading horizon Golden Bridge Investment is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, Golden Bridge Investment is 2.65 times less risky than KMH Hitech. The stock trades about -0.17 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 95,800 in KMH Hitech Co on November 9, 2024 and sell it today you would earn a total of 1,400 from holding KMH Hitech Co or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. KMH Hitech Co
Performance |
| Timeline |
| Golden Bridge Investment |
| KMH Hitech |
Golden Bridge and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and KMH Hitech
The main advantage of trading using opposite Golden Bridge and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Golden Bridge vs. Barunson Entertainment Arts | Golden Bridge vs. Kukdong Oil Chemicals | Golden Bridge vs. Kaonmedia Co | Golden Bridge vs. Hyundai Green Food |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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