Correlation Between Goldsun Building and HiTi Digital
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and HiTi Digital 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 HiTi Digital 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 HiTi Digital, you can compare the effects of market volatilities on Goldsun Building and HiTi Digital 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 HiTi Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and HiTi Digital.
Diversification Opportunities for Goldsun Building and HiTi Digital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goldsun and HiTi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and HiTi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HiTi Digital 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 HiTi Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HiTi Digital has no effect on the direction of Goldsun Building i.e., Goldsun Building and HiTi Digital go up and down completely randomly.
Pair Corralation between Goldsun Building and HiTi Digital
Assuming the 90 days trading horizon Goldsun Building is expected to generate 2.24 times less return on investment than HiTi Digital. But when comparing it to its historical volatility, Goldsun Building Materials is 3.41 times less risky than HiTi Digital. It trades about 0.09 of its potential returns per unit of risk. HiTi Digital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 678.00 in HiTi Digital on August 26, 2024 and sell it today you would earn a total of 1,073 from holding HiTi Digital or generate 158.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Goldsun Building Materials vs. HiTi Digital
Performance |
| Timeline |
| Goldsun Building Mat |
| HiTi Digital |
Goldsun Building and HiTi Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and HiTi Digital
The main advantage of trading using opposite Goldsun Building and HiTi Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, HiTi Digital 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 HiTi Digital will offset losses from the drop in HiTi Digital'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 |
| HiTi Digital vs. Novatek Microelectronics Corp | HiTi Digital vs. Quanta Computer | HiTi Digital vs. United Microelectronics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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