Correlation Between Voltronic Power and Golden Biotechnology
Can any of the company-specific risk be diversified away by investing in both Voltronic Power 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 Voltronic Power and Golden Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltronic Power Technology and Golden Biotechnology, you can compare the effects of market volatilities on Voltronic Power 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 Voltronic Power with a short position of Golden Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltronic Power and Golden Biotechnology.
Diversification Opportunities for Voltronic Power and Golden Biotechnology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Voltronic and Golden is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Voltronic Power Technology and Golden Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Biotechnology and Voltronic Power 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 Voltronic Power Technology 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 Voltronic Power i.e., Voltronic Power and Golden Biotechnology go up and down completely randomly.
Pair Corralation between Voltronic Power and Golden Biotechnology
Assuming the 90 days trading horizon Voltronic Power Technology is expected to under-perform the Golden Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Voltronic Power Technology is 2.0 times less risky than Golden Biotechnology. The stock trades about -0.02 of its potential returns per unit of risk. The Golden Biotechnology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,525 in Golden Biotechnology on October 24, 2024 and sell it today you would earn a total of 160.00 from holding Golden Biotechnology or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voltronic Power Technology vs. Golden Biotechnology
Performance |
| Timeline |
| Voltronic Power Tech |
| Golden Biotechnology |
Voltronic Power and Golden Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voltronic Power and Golden Biotechnology
The main advantage of trading using opposite Voltronic Power and Golden Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltronic Power 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.| Voltronic Power vs. Silergy Corp | Voltronic Power vs. Airtac International Group | Voltronic Power vs. Advantech Co | Voltronic Power vs. Sinbon Electronics Co |
| Golden Biotechnology vs. MediaTek | Golden Biotechnology vs. Grand Plastic Technology | Golden Biotechnology vs. Gamania Digital Entertainment | Golden Biotechnology vs. Air Asia Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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