Correlation Between Golden Bridge and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd, you can compare the effects of market volatilities on Golden Bridge and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and CHEMTRONICSCOLtd.
Diversification Opportunities for Golden Bridge and CHEMTRONICSCOLtd
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Golden and CHEMTRONICSCOLtd is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of Golden Bridge i.e., Golden Bridge and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between Golden Bridge and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon Golden Bridge Investment is expected to generate 0.61 times more return on investment than CHEMTRONICSCOLtd. However, Golden Bridge Investment is 1.64 times less risky than CHEMTRONICSCOLtd. It trades about -0.09 of its potential returns per unit of risk. CHEMTRONICSCOLtd is currently generating about -0.53 per unit of risk. If you would invest 45,100 in Golden Bridge Investment on September 4, 2024 and sell it today you would lose (1,200) from holding Golden Bridge Investment or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. CHEMTRONICSCOLtd
Performance |
| Timeline |
| Golden Bridge Investment |
| CHEMTRONICSCOLtd |
Golden Bridge and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and CHEMTRONICSCOLtd
The main advantage of trading using opposite Golden Bridge and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd's long position.| Golden Bridge vs. Visang Education | Golden Bridge vs. CKH Food Health | Golden Bridge vs. Samyang Foods Co | Golden Bridge vs. Tway Air Co |
| CHEMTRONICSCOLtd vs. Kukil Metal Co | CHEMTRONICSCOLtd vs. Taeyang Metal Industrial | CHEMTRONICSCOLtd vs. Dongil Metal Co | CHEMTRONICSCOLtd vs. Dongbang Transport Logistics |
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 Stocks Directory module to find actively traded stocks across global markets.
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