Correlation Between Nice Information and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Nice Information 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 Nice Information and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice Information Telecommunication and Golden Bridge Investment, you can compare the effects of market volatilities on Nice Information 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 Nice Information with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Golden Bridge.
Diversification Opportunities for Nice Information and Golden Bridge
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nice and Golden is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica 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 Nice Information 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 Nice Information Telecommunication 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 Nice Information i.e., Nice Information and Golden Bridge go up and down completely randomly.
Pair Corralation between Nice Information and Golden Bridge
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.41 times more return on investment than Golden Bridge. However, Nice Information Telecommunication is 2.44 times less risky than Golden Bridge. It trades about -0.16 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.23 per unit of risk. If you would invest 1,871,000 in Nice Information Telecommunication on August 29, 2024 and sell it today you would lose (42,000) from holding Nice Information Telecommunication or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Golden Bridge Investment
Performance |
| Timeline |
| Nice Information Tel |
| Golden Bridge Investment |
Nice Information and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Golden Bridge
The main advantage of trading using opposite Nice Information and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information 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.| Nice Information vs. Korea Real Estate | Nice Information vs. Korea Ratings Co | Nice Information vs. IQuest Co | Nice Information vs. Wonbang Tech Co |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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