Correlation Between Kedge Construction and Goldsun Building
Can any of the company-specific risk be diversified away by investing in both Kedge Construction and Goldsun 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 Kedge Construction and Goldsun Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedge Construction Co and Goldsun Building Materials, you can compare the effects of market volatilities on Kedge Construction and Goldsun 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 Kedge Construction with a short position of Goldsun Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedge Construction and Goldsun Building.
Diversification Opportunities for Kedge Construction and Goldsun Building
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kedge and Goldsun is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kedge Construction Co and Goldsun Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldsun Building Mat and Kedge Construction 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 Kedge Construction Co are associated (or correlated) with Goldsun Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldsun Building Mat has no effect on the direction of Kedge Construction i.e., Kedge Construction and Goldsun Building go up and down completely randomly.
Pair Corralation between Kedge Construction and Goldsun Building
Assuming the 90 days trading horizon Kedge Construction is expected to generate 1.61 times less return on investment than Goldsun Building. In addition to that, Kedge Construction is 1.01 times more volatile than Goldsun Building Materials. It trades about 0.06 of its total potential returns per unit of risk. Goldsun Building Materials is currently generating about 0.1 per unit of volatility. If you would invest 2,505 in Goldsun Building Materials on September 2, 2024 and sell it today you would earn a total of 2,895 from holding Goldsun Building Materials or generate 115.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kedge Construction Co vs. Goldsun Building Materials
Performance |
| Timeline |
| Kedge Construction |
| Goldsun Building Mat |
Kedge Construction and Goldsun Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kedge Construction and Goldsun Building
The main advantage of trading using opposite Kedge Construction and Goldsun Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedge Construction position performs unexpectedly, Goldsun 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 Goldsun Building will offset losses from the drop in Goldsun Building's long position.| Kedge Construction vs. Da Cin Construction Co | Kedge Construction vs. Kindom Construction Corp | Kedge Construction vs. Huaku Development Co | Kedge Construction vs. Highwealth Construction Corp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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