Correlation Between Goldsun Building and CKM Building
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and CKM Building 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 CKM Building 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 CKM Building Material, you can compare the effects of market volatilities on Goldsun Building and CKM Building 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 CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and CKM Building.
Diversification Opportunities for Goldsun Building and CKM Building
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldsun and CKM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material 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 CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Goldsun Building i.e., Goldsun Building and CKM Building go up and down completely randomly.
Pair Corralation between Goldsun Building and CKM Building
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 1.43 times more return on investment than CKM Building. However, Goldsun Building is 1.43 times more volatile than CKM Building Material. It trades about 0.06 of its potential returns per unit of risk. CKM Building Material is currently generating about -0.04 per unit of risk. If you would invest 4,665 in Goldsun Building Materials on August 29, 2024 and sell it today you would earn a total of 655.00 from holding Goldsun Building Materials or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldsun Building Materials vs. CKM Building Material
Performance |
| Timeline |
| Goldsun Building Mat |
| CKM Building Material |
Goldsun Building and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and CKM Building
The main advantage of trading using opposite Goldsun Building and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building'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 |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Champion Building Materials | CKM Building vs. Leatec Fine Ceramics | CKM Building vs. Information Technology Total |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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