Correlation Between Golden Bridge and SV Investment
Can any of the company-specific risk be diversified away by investing in both Golden Bridge and SV Investment 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 SV Investment 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 SV Investment, you can compare the effects of market volatilities on Golden Bridge and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Bridge and SV Investment.
Diversification Opportunities for Golden Bridge and SV Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Golden and 289080 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Golden Bridge Investment and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of Golden Bridge i.e., Golden Bridge and SV Investment go up and down completely randomly.
Pair Corralation between Golden Bridge and SV Investment
Assuming the 90 days trading horizon Golden Bridge Investment is expected to under-perform the SV Investment. But the stock apears to be less risky and, when comparing its historical volatility, Golden Bridge Investment is 1.44 times less risky than SV Investment. The stock trades about -0.06 of its potential returns per unit of risk. The SV Investment is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 223,421 in SV Investment on October 23, 2024 and sell it today you would lose (88,721) from holding SV Investment or give up 39.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Bridge Investment vs. SV Investment
Performance |
| Timeline |
| Golden Bridge Investment |
| SV Investment |
Golden Bridge and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Bridge and SV Investment
The main advantage of trading using opposite Golden Bridge and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Bridge position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| Golden Bridge vs. Han Kook Steel | Golden Bridge vs. Lotte Fine Chemical | Golden Bridge vs. J Steel Co | Golden Bridge vs. Wonil Special Steel |
| SV Investment vs. Sempio Foods Co | SV Investment vs. Seoul Food Industrial | SV Investment vs. Sajo Seafood | SV Investment vs. DB Insurance Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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