Correlation Between Goldsun Building and Hotel Holiday
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Hotel Holiday 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 Goldsun Building and Hotel Holiday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldsun Building Materials and Hotel Holiday Garden, you can compare the effects of market volatilities on Goldsun Building and Hotel Holiday 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 Goldsun Building with a short position of Hotel Holiday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Hotel Holiday.
Diversification Opportunities for Goldsun Building and Hotel Holiday
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldsun and Hotel is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Hotel Holiday Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Holiday Garden and Goldsun Building 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 Goldsun Building Materials are associated (or correlated) with Hotel Holiday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Holiday Garden has no effect on the direction of Goldsun Building i.e., Goldsun Building and Hotel Holiday go up and down completely randomly.
Pair Corralation between Goldsun Building and Hotel Holiday
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 1.07 times more return on investment than Hotel Holiday. However, Goldsun Building is 1.07 times more volatile than Hotel Holiday Garden. It trades about 0.09 of its potential returns per unit of risk. Hotel Holiday Garden is currently generating about -0.03 per unit of risk. If you would invest 2,495 in Goldsun Building Materials on August 27, 2024 and sell it today you would earn a total of 2,745 from holding Goldsun Building Materials or generate 110.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldsun Building Materials vs. Hotel Holiday Garden
Performance |
| Timeline |
| Goldsun Building Mat |
| Hotel Holiday Garden |
Goldsun Building and Hotel Holiday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Hotel Holiday
The main advantage of trading using opposite Goldsun Building and Hotel Holiday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Hotel Holiday 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 Hotel Holiday will offset losses from the drop in Hotel Holiday's long position.| Goldsun Building vs. Cathay Real Estate | Goldsun Building vs. Huaku Development Co | Goldsun Building vs. BES Engineering Co | Goldsun Building vs. Prince Housing Development |
| Hotel Holiday vs. Taiwan Semiconductor Manufacturing | Hotel Holiday vs. Hon Hai Precision | Hotel Holiday vs. MediaTek | Hotel Holiday vs. Chunghwa Telecom 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |