Correlation Between Daou Technology and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Daou Technology and Golden Bridge 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 Daou Technology and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Technology and Golden Bridge Investment, you can compare the effects of market volatilities on Daou Technology and Golden Bridge 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 Daou Technology with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Technology and Golden Bridge.
Diversification Opportunities for Daou Technology and Golden Bridge
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Golden is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Daou Technology and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Daou Technology 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 Daou Technology are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Daou Technology i.e., Daou Technology and Golden Bridge go up and down completely randomly.
Pair Corralation between Daou Technology and Golden Bridge
Assuming the 90 days trading horizon Daou Technology is expected to generate 0.78 times more return on investment than Golden Bridge. However, Daou Technology is 1.28 times less risky than Golden Bridge. It trades about -0.03 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.19 per unit of risk. If you would invest 1,879,000 in Daou Technology on September 29, 2024 and sell it today you would lose (101,000) from holding Daou Technology or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Technology vs. Golden Bridge Investment
Performance |
| Timeline |
| Daou Technology |
| Golden Bridge Investment |
Daou Technology and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Technology and Golden Bridge
The main advantage of trading using opposite Daou Technology and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Technology position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.| Daou Technology vs. Narae Nanotech Corp | Daou Technology vs. THiRA UTECH LTD | Daou Technology vs. Daejung Chemicals Metals | Daou Technology vs. Chorokbaem Healthcare Co |
| Golden Bridge vs. PLAYWITH | Golden Bridge vs. Sangsin Energy Display | Golden Bridge vs. SK Chemicals Co | Golden Bridge vs. Korean Reinsurance 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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