Correlation Between Golden Biotechnology and Hi Lai
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Hi Lai 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 Golden Biotechnology and Hi Lai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Hi Lai Foods Co, you can compare the effects of market volatilities on Golden Biotechnology and Hi Lai 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 Golden Biotechnology with a short position of Hi Lai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Hi Lai.
Diversification Opportunities for Golden Biotechnology and Hi Lai
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and 1268 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Hi Lai Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Lai Foods and Golden Biotechnology 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 Golden Biotechnology are associated (or correlated) with Hi Lai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Lai Foods has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Hi Lai go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Hi Lai
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Hi Lai. In addition to that, Golden Biotechnology is 2.08 times more volatile than Hi Lai Foods Co. It trades about -0.1 of its total potential returns per unit of risk. Hi Lai Foods Co is currently generating about 0.01 per unit of volatility. If you would invest 14,939 in Hi Lai Foods Co on September 19, 2024 and sell it today you would earn a total of 11.00 from holding Hi Lai Foods Co or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Golden Biotechnology vs. Hi Lai Foods Co
Performance |
| Timeline |
| Golden Biotechnology |
| Hi Lai Foods |
Golden Biotechnology and Hi Lai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Biotechnology and Hi Lai
The main advantage of trading using opposite Golden Biotechnology and Hi Lai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Hi Lai 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 Hi Lai will offset losses from the drop in Hi Lai's long position.| Golden Biotechnology vs. Hi Lai Foods Co | Golden Biotechnology vs. Tainet Communication System | Golden Biotechnology vs. First Hotel Co | Golden Biotechnology vs. Chief Telecom |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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