Correlation Between Golden Bridge and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on Golden Bridge and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and ChipsMedia.
Diversification Opportunities for Golden Bridge and ChipsMedia
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and ChipsMedia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Golden Bridge i.e., Golden Bridge and ChipsMedia go up and down completely randomly.
Pair Corralation between Golden Bridge and ChipsMedia
Assuming the 90 days trading horizon Golden Bridge Investment is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Golden Bridge Investment is 3.65 times less risky than ChipsMedia. The stock trades about -0.03 of its potential returns per unit of risk. The ChipsMedia is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,356,000 in ChipsMedia on November 3, 2024 and sell it today you would earn a total of 608,000 from holding ChipsMedia or generate 44.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. ChipsMedia
Performance |
| Timeline |
| Golden Bridge Investment |
| ChipsMedia |
Golden Bridge and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and ChipsMedia
The main advantage of trading using opposite Golden Bridge and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Golden Bridge vs. E Investment Development | Golden Bridge vs. EBEST Investment Securities | Golden Bridge vs. Daol Investment Securities | Golden Bridge vs. SBI Investment KOREA |
| ChipsMedia vs. Formetal Co | ChipsMedia vs. LG Display Co | ChipsMedia vs. Daiyang Metal Co | ChipsMedia vs. Nable Communications |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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