Correlation Between Goldsun Building and Shuang Bang
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Shuang Bang 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 Shuang Bang 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 Shuang Bang Industrial, you can compare the effects of market volatilities on Goldsun Building and Shuang Bang 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 Shuang Bang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Shuang Bang.
Diversification Opportunities for Goldsun Building and Shuang Bang
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldsun and Shuang is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Shuang Bang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuang Bang Industrial 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 Shuang Bang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuang Bang Industrial has no effect on the direction of Goldsun Building i.e., Goldsun Building and Shuang Bang go up and down completely randomly.
Pair Corralation between Goldsun Building and Shuang Bang
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 1.16 times more return on investment than Shuang Bang. However, Goldsun Building is 1.16 times more volatile than Shuang Bang Industrial. It trades about 0.0 of its potential returns per unit of risk. Shuang Bang Industrial is currently generating about -0.28 per unit of risk. If you would invest 5,270 in Goldsun Building Materials on August 26, 2024 and sell it today you would lose (30.00) from holding Goldsun Building Materials or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldsun Building Materials vs. Shuang Bang Industrial
Performance |
| Timeline |
| Goldsun Building Mat |
| Shuang Bang Industrial |
Goldsun Building and Shuang Bang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Shuang Bang
The main advantage of trading using opposite Goldsun Building and Shuang Bang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Shuang Bang 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 Shuang Bang will offset losses from the drop in Shuang Bang'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 |
| Shuang Bang vs. Delta Electronics | Shuang Bang vs. China Steel Chemical | Shuang Bang vs. Hota Industrial Mfg | Shuang Bang vs. Ruentex Development 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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