Correlation Between Golden Bridge and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and Sempio Foods 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 Sempio Foods 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 Sempio Foods Co, you can compare the effects of market volatilities on Golden Bridge and Sempio Foods 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 Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and Sempio Foods.
Diversification Opportunities for Golden Bridge and Sempio Foods
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Sempio is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods 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 Sempio Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempio Foods has no effect on the direction of Golden Bridge i.e., Golden Bridge and Sempio Foods go up and down completely randomly.
Pair Corralation between Golden Bridge and Sempio Foods
Assuming the 90 days trading horizon Golden Bridge Investment is expected to generate 0.8 times more return on investment than Sempio Foods. However, Golden Bridge Investment is 1.25 times less risky than Sempio Foods. It trades about -0.25 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.24 per unit of risk. If you would invest 47,700 in Golden Bridge Investment on August 27, 2024 and sell it today you would lose (3,900) from holding Golden Bridge Investment or give up 8.18% 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. Sempio Foods Co
Performance |
| Timeline |
| Golden Bridge Investment |
| Sempio Foods |
Golden Bridge and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and Sempio Foods
The main advantage of trading using opposite Golden Bridge and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, Sempio Foods 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 Sempio Foods will offset losses from the drop in Sempio Foods' long position.| Golden Bridge vs. AptaBio Therapeutics | Golden Bridge vs. Daewoo SBI SPAC | Golden Bridge vs. Dream Security co | Golden Bridge vs. Microfriend |
| Sempio Foods vs. Woori Technology Investment | Sempio Foods vs. DB Financial Investment | Sempio Foods vs. Golden Bridge Investment | Sempio Foods vs. SBI Investment KOREA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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