Correlation Between Cathay Real and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Cathay Real 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 Cathay Real and Goldsun Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay Real Estate and Goldsun Building Materials, you can compare the effects of market volatilities on Cathay Real 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 Cathay Real with a short position of Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay Real and Goldsun Building.
Diversification Opportunities for Cathay Real and Goldsun Building
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cathay and Goldsun is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cathay Real Estate 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 Cathay Real 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 Cathay Real Estate 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 Cathay Real i.e., Cathay Real and Goldsun Building go up and down completely randomly.
Pair Corralation between Cathay Real and Goldsun Building
Assuming the 90 days trading horizon Cathay Real Estate is expected to under-perform the Goldsun Building. In addition to that, Cathay Real is 1.14 times more volatile than Goldsun Building Materials. It trades about -0.09 of its total potential returns per unit of risk. Goldsun Building Materials is currently generating about 0.06 per unit of volatility. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathay Real Estate vs. Goldsun Building Materials
Performance |
| Timeline |
| Cathay Real Estate |
| Goldsun Building Mat |
Cathay Real and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay Real and Goldsun Building
The main advantage of trading using opposite Cathay Real and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay Real 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.| Cathay Real vs. Tainan Spinning Co | Cathay Real vs. Carnival Industrial Corp | Cathay Real vs. Symtek Automation Asia | Cathay Real vs. CTCI 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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