Correlation Between ChipsMedia and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both ChipsMedia 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 ChipsMedia and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Golden Bridge Investment, you can compare the effects of market volatilities on ChipsMedia 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 ChipsMedia with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Golden Bridge.
Diversification Opportunities for ChipsMedia and Golden Bridge
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ChipsMedia and Golden is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia 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 ChipsMedia 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 ChipsMedia 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 ChipsMedia i.e., ChipsMedia and Golden Bridge go up and down completely randomly.
Pair Corralation between ChipsMedia and Golden Bridge
Assuming the 90 days trading horizon ChipsMedia is expected to generate 3.65 times more return on investment than Golden Bridge. However, ChipsMedia is 3.65 times more volatile than Golden Bridge Investment. It trades about 0.22 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.03 per unit of risk. If you would invest 1,356,000 in ChipsMedia on November 3, 2024 and sell it today you would earn a total of 608,000 from holding ChipsMedia or generate 44.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Golden Bridge Investment
Performance |
| Timeline |
| ChipsMedia |
| Golden Bridge Investment |
ChipsMedia and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Golden Bridge
The main advantage of trading using opposite ChipsMedia and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia 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.| ChipsMedia vs. Formetal Co | ChipsMedia vs. LG Display Co | ChipsMedia vs. Daiyang Metal Co | ChipsMedia vs. Nable Communications |
| Golden Bridge vs. E Investment Development | Golden Bridge vs. EBEST Investment Securities | Golden Bridge vs. Daol Investment Securities | Golden Bridge vs. SBI Investment KOREA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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