Correlation Between Nan Ya and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Goldsun Building 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 Nan Ya and Goldsun Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Goldsun Building Materials, you can compare the effects of market volatilities on Nan Ya and Goldsun Building 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 Nan Ya with a short position of Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Goldsun Building.
Diversification Opportunities for Nan Ya and Goldsun Building
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nan and Goldsun is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Nan Ya i.e., Nan Ya and Goldsun Building go up and down completely randomly.
Pair Corralation between Nan Ya and Goldsun Building
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Goldsun Building. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Plastics is 1.29 times less risky than Goldsun Building. The stock trades about -0.13 of its potential returns per unit of risk. The Goldsun Building Materials is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,665 in Goldsun Building Materials on August 29, 2024 and sell it today you would earn a total of 655.00 from holding Goldsun Building Materials or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Goldsun Building Materials
Performance |
| Timeline |
| Nan Ya Plastics |
| Goldsun Building Mat |
Nan Ya and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Goldsun Building
The main advantage of trading using opposite Nan Ya and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Goldsun Building 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 Goldsun Building will offset losses from the drop in Goldsun Building's long position.| Nan Ya vs. Formosa Plastics Corp | Nan Ya vs. Formosa Chemicals Fibre | Nan Ya vs. China Steel Corp | Nan Ya vs. Formosa Petrochemical Corp |
| Goldsun Building vs. Cathay Real Estate | Goldsun Building vs. Huaku Development Co | Goldsun Building vs. BES Engineering Co | Goldsun Building vs. Prince Housing Development |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets |