Correlation Between Goldsun Building and Thunder Tiger
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Thunder Tiger 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 Thunder Tiger 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 Thunder Tiger Corp, you can compare the effects of market volatilities on Goldsun Building and Thunder Tiger 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 Thunder Tiger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Thunder Tiger.
Diversification Opportunities for Goldsun Building and Thunder Tiger
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldsun and Thunder is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Thunder Tiger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Tiger Corp 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 Thunder Tiger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Tiger Corp has no effect on the direction of Goldsun Building i.e., Goldsun Building and Thunder Tiger go up and down completely randomly.
Pair Corralation between Goldsun Building and Thunder Tiger
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 1.01 times more return on investment than Thunder Tiger. However, Goldsun Building is 1.01 times more volatile than Thunder Tiger Corp. It trades about 0.0 of its potential returns per unit of risk. Thunder Tiger Corp is currently generating about -0.12 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldsun Building Materials vs. Thunder Tiger Corp
Performance |
| Timeline |
| Goldsun Building Mat |
| Thunder Tiger Corp |
Goldsun Building and Thunder Tiger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Thunder Tiger
The main advantage of trading using opposite Goldsun Building and Thunder Tiger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Thunder Tiger 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 Thunder Tiger will offset losses from the drop in Thunder Tiger'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 |
| Thunder Tiger vs. Taiwan Semiconductor Manufacturing | Thunder Tiger vs. Hon Hai Precision | Thunder Tiger vs. MediaTek | Thunder Tiger 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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