Correlation Between Goldsun Building and Ching Feng
Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Ching Feng 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 Ching Feng 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 Ching Feng Home, you can compare the effects of market volatilities on Goldsun Building and Ching Feng 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 Ching Feng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Ching Feng.
Diversification Opportunities for Goldsun Building and Ching Feng
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldsun and Ching is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Ching Feng Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ching Feng Home 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 Ching Feng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ching Feng Home has no effect on the direction of Goldsun Building i.e., Goldsun Building and Ching Feng go up and down completely randomly.
Pair Corralation between Goldsun Building and Ching Feng
Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 0.88 times more return on investment than Ching Feng. However, Goldsun Building Materials is 1.14 times less risky than Ching Feng. It trades about 0.03 of its potential returns per unit of risk. Ching Feng Home is currently generating about -0.14 per unit of risk. If you would invest 5,360 in Goldsun Building Materials on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Goldsun Building Materials or generate 0.75% 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. Ching Feng Home
Performance |
| Timeline |
| Goldsun Building Mat |
| Ching Feng Home |
Goldsun Building and Ching Feng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldsun Building and Ching Feng
The main advantage of trading using opposite Goldsun Building and Ching Feng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldsun Building position performs unexpectedly, Ching Feng 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 Ching Feng will offset losses from the drop in Ching Feng's long position.| Goldsun Building vs. Basso Industry Corp | Goldsun Building vs. Chung Hsin Electric Machinery | Goldsun Building vs. TYC Brother Industrial | Goldsun Building vs. TECO Electric Machinery |
| Ching Feng vs. Chaintech Technology Corp | Ching Feng vs. AVerMedia Technologies | Ching Feng vs. Avision | Ching Feng vs. Clevo 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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