Correlation Between Arbor Technology and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Arbor Technology and Golden Biotechnology 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 Arbor Technology and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Technology and Golden Biotechnology, you can compare the effects of market volatilities on Arbor Technology and Golden Biotechnology 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 Arbor Technology with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Technology and Golden Biotechnology.
Diversification Opportunities for Arbor Technology and Golden Biotechnology
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arbor and Golden is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Technology and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Arbor Technology 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 Arbor Technology are associated (or correlated) with Golden Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Biotechnology has no effect on the direction of Arbor Technology i.e., Arbor Technology and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Arbor Technology and Golden Biotechnology
Assuming the 90 days trading horizon Arbor Technology is expected to generate 2.29 times more return on investment than Golden Biotechnology. However, Arbor Technology is 2.29 times more volatile than Golden Biotechnology. It trades about 0.55 of its potential returns per unit of risk. Golden Biotechnology is currently generating about -0.28 per unit of risk. If you would invest 4,715 in Arbor Technology on November 28, 2024 and sell it today you would earn a total of 1,535 from holding Arbor Technology or generate 32.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Technology vs. Golden Biotechnology
Performance |
| Timeline |
| Arbor Technology |
| Golden Biotechnology |
Arbor Technology and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Technology and Golden Biotechnology
The main advantage of trading using opposite Arbor Technology and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Technology position performs unexpectedly, Golden Biotechnology 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 Golden Biotechnology will offset losses from the drop in Golden Biotechnology's long position.| Arbor Technology vs. SciVision Biotech | Arbor Technology vs. Etrend Hightech | Arbor Technology vs. Castles Technology Co | Arbor Technology vs. Asmedia Technology |
| Golden Biotechnology vs. Shih Kuen Plastics | Golden Biotechnology vs. Champion Building Materials | Golden Biotechnology vs. Farglory FTZ Investment | Golden Biotechnology vs. Ocean Plastics 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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