Correlation Between Golden Biotechnology and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Sunny Friend 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 Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Sunny Friend Environmental, you can compare the effects of market volatilities on Golden Biotechnology and Sunny Friend 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 Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Sunny Friend.
Diversification Opportunities for Golden Biotechnology and Sunny Friend
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Sunny is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ 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 Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Sunny Friend go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Sunny Friend
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Sunny Friend. In addition to that, Golden Biotechnology is 1.84 times more volatile than Sunny Friend Environmental. It trades about -0.07 of its total potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.02 per unit of volatility. If you would invest 9,630 in Sunny Friend Environmental on September 1, 2024 and sell it today you would lose (620.00) from holding Sunny Friend Environmental or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Biotechnology vs. Sunny Friend Environmental
Performance |
| Timeline |
| Golden Biotechnology |
| Sunny Friend Environ |
Golden Biotechnology and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Biotechnology and Sunny Friend
The main advantage of trading using opposite Golden Biotechnology and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend'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 |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. TTET Union Corp | Sunny Friend vs. Tehmag Foods |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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