Correlation Between Golden Bridge and IM CoLtd
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and IM CoLtd 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 IM CoLtd 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 IM CoLtd, you can compare the effects of market volatilities on Golden Bridge and IM CoLtd 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 IM CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and IM CoLtd.
Diversification Opportunities for Golden Bridge and IM CoLtd
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and 101390 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and IM CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM CoLtd 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 IM CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM CoLtd has no effect on the direction of Golden Bridge i.e., Golden Bridge and IM CoLtd go up and down completely randomly.
Pair Corralation between Golden Bridge and IM CoLtd
Assuming the 90 days trading horizon Golden Bridge Investment is expected to generate 0.44 times more return on investment than IM CoLtd. However, Golden Bridge Investment is 2.29 times less risky than IM CoLtd. It trades about -0.23 of its potential returns per unit of risk. IM CoLtd is currently generating about -0.16 per unit of risk. If you would invest 47,700 in Golden Bridge Investment on August 29, 2024 and sell it today you would lose (3,600) from holding Golden Bridge Investment or give up 7.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. IM CoLtd
Performance |
| Timeline |
| Golden Bridge Investment |
| IM CoLtd |
Golden Bridge and IM CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and IM CoLtd
The main advantage of trading using opposite Golden Bridge and IM CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, IM CoLtd 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 IM CoLtd will offset losses from the drop in IM CoLtd's long position.| Golden Bridge vs. LB Investment | Golden Bridge vs. Samyang Foods Co | Golden Bridge vs. Dongwon Metal Co | Golden Bridge vs. Daiyang Metal Co |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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