Correlation Between Quanta Storage and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Quanta Storage 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 Quanta Storage and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanta Storage and Golden Biotechnology, you can compare the effects of market volatilities on Quanta Storage 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 Quanta Storage with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanta Storage and Golden Biotechnology.
Diversification Opportunities for Quanta Storage and Golden Biotechnology
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quanta and Golden is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Storage and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Quanta Storage 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 Quanta Storage 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 Quanta Storage i.e., Quanta Storage and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Quanta Storage and Golden Biotechnology
Assuming the 90 days trading horizon Quanta Storage is expected to generate 3.88 times less return on investment than Golden Biotechnology. But when comparing it to its historical volatility, Quanta Storage is 1.17 times less risky than Golden Biotechnology. It trades about 0.07 of its potential returns per unit of risk. Golden Biotechnology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Golden Biotechnology on October 16, 2024 and sell it today you would earn a total of 305.00 from holding Golden Biotechnology or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanta Storage vs. Golden Biotechnology
Performance |
| Timeline |
| Quanta Storage |
| Golden Biotechnology |
Quanta Storage and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanta Storage and Golden Biotechnology
The main advantage of trading using opposite Quanta Storage and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanta Storage 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.| Quanta Storage vs. Qisda Corp | Quanta Storage vs. Quanta Computer | Quanta Storage vs. Coretronic | Quanta Storage vs. Wistron Corp |
| Golden Biotechnology vs. Tang Eng Iron | Golden Biotechnology vs. Chung Hung Steel | Golden Biotechnology vs. Tradetool Auto Co | Golden Biotechnology vs. Sunny Friend Environmental |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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