Correlation Between Golden Bridge and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and Hyundai Home 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 Hyundai Home 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 Hyundai Home Shopping, you can compare the effects of market volatilities on Golden Bridge and Hyundai Home 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 Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and Hyundai Home.
Diversification Opportunities for Golden Bridge and Hyundai Home
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Hyundai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping 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 Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Golden Bridge i.e., Golden Bridge and Hyundai Home go up and down completely randomly.
Pair Corralation between Golden Bridge and Hyundai Home
Assuming the 90 days trading horizon Golden Bridge Investment is expected to generate 0.75 times more return on investment than Hyundai Home. However, Golden Bridge Investment is 1.33 times less risky than Hyundai Home. It trades about 0.13 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about -0.23 per unit of risk. If you would invest 42,600 in Golden Bridge Investment on October 16, 2024 and sell it today you would earn a total of 1,000.00 from holding Golden Bridge Investment or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. Hyundai Home Shopping
Performance |
| Timeline |
| Golden Bridge Investment |
| Hyundai Home Shopping |
Golden Bridge and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and Hyundai Home
The main advantage of trading using opposite Golden Bridge and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, Hyundai Home 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 Hyundai Home will offset losses from the drop in Hyundai Home's long position.| Golden Bridge vs. Sempio Foods Co | Golden Bridge vs. Organic Special Pet | Golden Bridge vs. FoodNamoo | Golden Bridge vs. Iljin Display |
| Hyundai Home vs. Kyeryong Construction Industrial | Hyundai Home vs. Mobile Appliance | Hyundai Home vs. Daishin Information Communications | Hyundai Home vs. Dongwoo Farm To |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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