Correlation Between Alton Sports and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Golden Bridge Investment, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Golden Bridge.
Diversification Opportunities for Alton Sports and Golden Bridge
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alton and Golden is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd 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 Alton Sports 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 Alton Sports CoLtd 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 Alton Sports i.e., Alton Sports and Golden Bridge go up and down completely randomly.
Pair Corralation between Alton Sports and Golden Bridge
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 2.28 times more return on investment than Golden Bridge. However, Alton Sports is 2.28 times more volatile than Golden Bridge Investment. It trades about -0.03 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.18 per unit of risk. If you would invest 146,500 in Alton Sports CoLtd on November 8, 2024 and sell it today you would lose (1,800) from holding Alton Sports CoLtd or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Golden Bridge Investment
Performance |
| Timeline |
| Alton Sports CoLtd |
| Golden Bridge Investment |
Alton Sports and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Golden Bridge
The main advantage of trading using opposite Alton Sports and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. A Tech Solution Co | Alton Sports vs. Eagon Industrial Co | Alton Sports vs. RFTech Co | Alton Sports vs. Dongbang Transport Logistics |
| Golden Bridge vs. Kukdo Chemical Co | Golden Bridge vs. Lotte Fine Chemical | Golden Bridge vs. Woorim Machinery Co | Golden Bridge vs. KEPCO Engineering Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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