Correlation Between Nankang Rubber and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Nankang Rubber 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 Nankang Rubber and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nankang Rubber Tire and Golden Biotechnology, you can compare the effects of market volatilities on Nankang Rubber 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 Nankang Rubber with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nankang Rubber and Golden Biotechnology.
Diversification Opportunities for Nankang Rubber and Golden Biotechnology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nankang and Golden is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nankang Rubber Tire and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Nankang Rubber 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 Nankang Rubber Tire 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 Nankang Rubber i.e., Nankang Rubber and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Nankang Rubber and Golden Biotechnology
Assuming the 90 days trading horizon Nankang Rubber Tire is expected to generate 0.71 times more return on investment than Golden Biotechnology. However, Nankang Rubber Tire is 1.41 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 -0.02 per unit of risk. If you would invest 4,995 in Nankang Rubber Tire on September 12, 2024 and sell it today you would lose (55.00) from holding Nankang Rubber Tire or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nankang Rubber Tire vs. Golden Biotechnology
Performance |
| Timeline |
| Nankang Rubber Tire |
| Golden Biotechnology |
Nankang Rubber and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nankang Rubber and Golden Biotechnology
The main advantage of trading using opposite Nankang Rubber and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nankang Rubber 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.| Nankang Rubber vs. Feng Tay Enterprises | Nankang Rubber vs. Ruentex Development Co | Nankang Rubber vs. WiseChip Semiconductor | Nankang Rubber vs. Novatek Microelectronics Corp |
| Golden Biotechnology vs. Grape King Bio | Golden Biotechnology vs. YungShin Global Holding | Golden Biotechnology vs. Standard Chemical Pharmaceutical |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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