Correlation Between Stic Investments and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Stic Investments 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 Stic Investments and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Golden Bridge Investment, you can compare the effects of market volatilities on Stic Investments 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 Stic Investments with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Golden Bridge.
Diversification Opportunities for Stic Investments and Golden Bridge
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and Golden is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments 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 Stic Investments 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 Stic Investments 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 Stic Investments i.e., Stic Investments and Golden Bridge go up and down completely randomly.
Pair Corralation between Stic Investments and Golden Bridge
Assuming the 90 days trading horizon Stic Investments is expected to generate 1.34 times more return on investment than Golden Bridge. However, Stic Investments is 1.34 times more volatile than Golden Bridge Investment. It trades about 0.02 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.12 per unit of risk. If you would invest 805,000 in Stic Investments on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Stic Investments or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Golden Bridge Investment
Performance |
| Timeline |
| Stic Investments |
| Golden Bridge Investment |
Stic Investments and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Golden Bridge
The main advantage of trading using opposite Stic Investments and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments 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.| Stic Investments vs. Daou Data Corp | Stic Investments vs. Busan Industrial Co | Stic Investments vs. Busan Ind | Stic Investments vs. Shinhan WTI Futures |
| Golden Bridge vs. Sempio Foods Co | Golden Bridge vs. Sangsangin Investment Securities | Golden Bridge vs. NH Investment Securities | Golden Bridge vs. Samlip General Foods |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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