Correlation Between BIT Computer and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both BIT Computer 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 BIT Computer and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIT Computer Co and Golden Bridge Investment, you can compare the effects of market volatilities on BIT Computer 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 BIT Computer with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIT Computer and Golden Bridge.
Diversification Opportunities for BIT Computer and Golden Bridge
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIT and Golden is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BIT Computer Co 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 BIT Computer 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 BIT Computer Co 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 BIT Computer i.e., BIT Computer and Golden Bridge go up and down completely randomly.
Pair Corralation between BIT Computer and Golden Bridge
Assuming the 90 days trading horizon BIT Computer Co is expected to generate 1.64 times more return on investment than Golden Bridge. However, BIT Computer is 1.64 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 -0.08 per unit of risk. If you would invest 654,984 in BIT Computer Co on August 28, 2024 and sell it today you would lose (159,484) from holding BIT Computer Co or give up 24.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIT Computer Co vs. Golden Bridge Investment
Performance |
| Timeline |
| BIT Computer |
| Golden Bridge Investment |
BIT Computer and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIT Computer and Golden Bridge
The main advantage of trading using opposite BIT Computer and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIT Computer 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.| BIT Computer vs. Medy Tox | BIT Computer vs. Busan Industrial Co | BIT Computer vs. Busan Ind | BIT Computer vs. Mirae Asset Daewoo |
| Golden Bridge vs. LB Investment | Golden Bridge vs. Samyang Foods Co | Golden Bridge vs. Dongwon Metal Co | Golden Bridge vs. Daiyang Metal 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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