Correlation Between Golden Biotechnology and Kworld Computer
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Kworld Computer 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 Kworld Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Kworld Computer Co, you can compare the effects of market volatilities on Golden Biotechnology and Kworld Computer 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 Kworld Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Kworld Computer.
Diversification Opportunities for Golden Biotechnology and Kworld Computer
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Kworld is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Kworld Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kworld Computer 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 Kworld Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kworld Computer has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Kworld Computer go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Kworld Computer
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Kworld Computer. But the stock apears to be less risky and, when comparing its historical volatility, Golden Biotechnology is 1.16 times less risky than Kworld Computer. The stock trades about -0.06 of its potential returns per unit of risk. The Kworld Computer Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Kworld Computer Co on October 16, 2024 and sell it today you would earn a total of 1,705 from holding Kworld Computer Co or generate 122.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Golden Biotechnology vs. Kworld Computer Co
Performance |
| Timeline |
| Golden Biotechnology |
| Kworld Computer |
Golden Biotechnology and Kworld Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Biotechnology and Kworld Computer
The main advantage of trading using opposite Golden Biotechnology and Kworld Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Kworld Computer 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 Kworld Computer will offset losses from the drop in Kworld Computer's long position.| Golden Biotechnology vs. Trade Van Information Services | Golden Biotechnology vs. Quanta Storage | Golden Biotechnology vs. Otsuka Information Technology | Golden Biotechnology vs. PChome Online |
| Kworld Computer vs. GeneReach Biotechnology | Kworld Computer vs. Aker Technology Co | Kworld Computer vs. Golden Biotechnology | Kworld Computer vs. Central Reinsurance Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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