Correlation Between Goldsun Building and Auras Technology
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Auras Technology 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 Auras Technology 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 Auras Technology Co, you can compare the effects of market volatilities on Goldsun Building and Auras Technology 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 Auras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Auras Technology.
Diversification Opportunities for Goldsun Building and Auras Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldsun and Auras is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Auras Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auras Technology 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 Auras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auras Technology has no effect on the direction of Goldsun Building i.e., Goldsun Building and Auras Technology go up and down completely randomly.
Pair Corralation between Goldsun Building and Auras Technology
Assuming the 90 days trading horizon Goldsun Building is expected to generate 1.12 times less return on investment than Auras Technology. But when comparing it to its historical volatility, Goldsun Building Materials is 1.89 times less risky than Auras Technology. It trades about 0.06 of its potential returns per unit of risk. Auras Technology Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 67,000 in Auras Technology Co on August 31, 2024 and sell it today you would earn a total of 1,200 from holding Auras Technology Co or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Goldsun Building Materials vs. Auras Technology Co
Performance |
| Timeline |
| Goldsun Building Mat |
| Auras Technology |
Goldsun Building and Auras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Auras Technology
The main advantage of trading using opposite Goldsun Building and Auras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Auras Technology 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 Auras Technology will offset losses from the drop in Auras Technology's long position.| Goldsun Building vs. Basso Industry Corp | Goldsun Building vs. Chung Hsin Electric Machinery | Goldsun Building vs. TYC Brother Industrial | Goldsun Building vs. TECO Electric Machinery |
| Auras Technology vs. Louisa Professional Coffee | Auras Technology vs. Shanghai Commercial Savings | Auras Technology vs. Univacco Technology | Auras Technology vs. Wei Chuan Foods |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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