Correlation Between Golden Biotechnology and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Asia Electronic 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 Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Asia Electronic Material, you can compare the effects of market volatilities on Golden Biotechnology and Asia Electronic 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 Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Asia Electronic.
Diversification Opportunities for Golden Biotechnology and Asia Electronic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and Asia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material 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 Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Asia Electronic go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Asia Electronic
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Asia Electronic. In addition to that, Golden Biotechnology is 1.66 times more volatile than Asia Electronic Material. It trades about -0.24 of its total potential returns per unit of risk. Asia Electronic Material is currently generating about -0.13 per unit of volatility. If you would invest 2,095 in Asia Electronic Material on September 1, 2024 and sell it today you would lose (60.00) from holding Asia Electronic Material or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Biotechnology vs. Asia Electronic Material
Performance |
| Timeline |
| Golden Biotechnology |
| Asia Electronic Material |
Golden Biotechnology and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Biotechnology and Asia Electronic
The main advantage of trading using opposite Golden Biotechnology and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| Golden Biotechnology vs. Grape King Bio | Golden Biotechnology vs. ScinoPharm Taiwan | Golden Biotechnology vs. TTY Biopharm Co | Golden Biotechnology vs. YungShin Global Holding |
| Asia Electronic vs. GameSparcs Co | Asia Electronic vs. Microelectronics Technology | Asia Electronic vs. GAME HOURS | Asia Electronic vs. TWOWAY Communications |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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