Correlation Between Lee Ku and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Lee Ku 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 Lee Ku and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lee Ku Industrial and Golden Bridge Investment, you can compare the effects of market volatilities on Lee Ku 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 Lee Ku with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lee Ku and Golden Bridge.
Diversification Opportunities for Lee Ku and Golden Bridge
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lee and Golden is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lee Ku Industrial 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 Lee Ku 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 Lee Ku Industrial 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 Lee Ku i.e., Lee Ku and Golden Bridge go up and down completely randomly.
Pair Corralation between Lee Ku and Golden Bridge
Assuming the 90 days trading horizon Lee Ku Industrial is expected to generate 2.08 times more return on investment than Golden Bridge. However, Lee Ku is 2.08 times more volatile than Golden Bridge Investment. It trades about -0.01 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.04 per unit of risk. If you would invest 442,500 in Lee Ku Industrial on October 30, 2024 and sell it today you would lose (20,000) from holding Lee Ku Industrial or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lee Ku Industrial vs. Golden Bridge Investment
Performance |
| Timeline |
| Lee Ku Industrial |
| Golden Bridge Investment |
Lee Ku and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lee Ku and Golden Bridge
The main advantage of trading using opposite Lee Ku and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lee Ku 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.| Lee Ku vs. Vitzro Tech Co | Lee Ku vs. FNSTech Co | Lee Ku vs. KPX Green Chemical | Lee Ku vs. Daejung Chemicals Metals |
| Golden Bridge vs. Lotte Data Communication | Golden Bridge vs. Nice Information Telecommunication | Golden Bridge vs. Dongwoo Farm To | Golden Bridge vs. Keyang Electric Machinery |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |