Correlation Between ITM Semiconductor and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor 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 ITM Semiconductor and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Golden Bridge Investment, you can compare the effects of market volatilities on ITM Semiconductor 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 ITM Semiconductor with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Golden Bridge.
Diversification Opportunities for ITM Semiconductor and Golden Bridge
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITM and Golden is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor i.e., ITM Semiconductor and Golden Bridge go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Golden Bridge
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to generate 1.83 times more return on investment than Golden Bridge. However, ITM Semiconductor is 1.83 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 -0.08 per unit of risk. If you would invest 2,460,000 in ITM Semiconductor Co on September 2, 2024 and sell it today you would lose (959,000) from holding ITM Semiconductor Co or give up 38.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Golden Bridge Investment
Performance |
| Timeline |
| ITM Semiconductor |
| Golden Bridge Investment |
ITM Semiconductor and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Golden Bridge
The main advantage of trading using opposite ITM Semiconductor and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor 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.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. SIMMTECH Co |
| Golden Bridge vs. AptaBio Therapeutics | Golden Bridge vs. Daewoo SBI SPAC | Golden Bridge vs. Dream Security co | Golden Bridge vs. Microfriend |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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