Correlation Between Sesoda Corp and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Sesoda Corp and Golden Biotechnology 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 Sesoda Corp and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sesoda Corp and Golden Biotechnology, you can compare the effects of market volatilities on Sesoda Corp and Golden Biotechnology 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 Sesoda Corp with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sesoda Corp and Golden Biotechnology.
Diversification Opportunities for Sesoda Corp and Golden Biotechnology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sesoda and Golden is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sesoda Corp and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Sesoda Corp 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 Sesoda Corp are associated (or correlated) with Golden Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Biotechnology has no effect on the direction of Sesoda Corp i.e., Sesoda Corp and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Sesoda Corp and Golden Biotechnology
Assuming the 90 days trading horizon Sesoda Corp is expected to generate 0.57 times more return on investment than Golden Biotechnology. However, Sesoda Corp is 1.77 times less risky than Golden Biotechnology. It trades about 0.0 of its potential returns per unit of risk. Golden Biotechnology is currently generating about -0.07 per unit of risk. If you would invest 4,395 in Sesoda Corp on November 28, 2024 and sell it today you would lose (335.00) from holding Sesoda Corp or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sesoda Corp vs. Golden Biotechnology
Performance |
| Timeline |
| Sesoda Corp |
| Golden Biotechnology |
Sesoda Corp and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sesoda Corp and Golden Biotechnology
The main advantage of trading using opposite Sesoda Corp and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sesoda Corp position performs unexpectedly, Golden Biotechnology 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 Biotechnology will offset losses from the drop in Golden Biotechnology's long position.| Sesoda Corp vs. Taiwan Fertilizer Co | Sesoda Corp vs. Sinon Corp | Sesoda Corp vs. Eternal Materials Co | Sesoda Corp vs. Oriental Union Chemical |
| Golden Biotechnology vs. Shih Kuen Plastics | Golden Biotechnology vs. Champion Building Materials | Golden Biotechnology vs. Farglory FTZ Investment | Golden Biotechnology vs. Ocean Plastics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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