Correlation Between Goldsun Building and Ingentec
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Ingentec 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 Ingentec 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 Ingentec, you can compare the effects of market volatilities on Goldsun Building and Ingentec 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 Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Ingentec.
Diversification Opportunities for Goldsun Building and Ingentec
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldsun and Ingentec is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec 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 Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Goldsun Building i.e., Goldsun Building and Ingentec go up and down completely randomly.
Pair Corralation between Goldsun Building and Ingentec
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 0.93 times more return on investment than Ingentec. However, Goldsun Building Materials is 1.07 times less risky than Ingentec. It trades about 0.05 of its potential returns per unit of risk. Ingentec is currently generating about -0.19 per unit of risk. If you would invest 5,230 in Goldsun Building Materials on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Goldsun Building Materials or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldsun Building Materials vs. Ingentec
Performance |
| Timeline |
| Goldsun Building Mat |
| Ingentec |
Goldsun Building and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Ingentec
The main advantage of trading using opposite Goldsun Building and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec'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 |
| Ingentec vs. Nantex Industry Co | Ingentec vs. Chong Hong Construction | Ingentec vs. Cleanaway Co | Ingentec vs. Symtek Automation Asia |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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