Correlation Between Trusval Technology and Golden Friends
Can any of the company-specific risk be diversified away by investing in both Trusval Technology and Golden Friends 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 Trusval Technology and Golden Friends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trusval Technology Co and Golden Friends, you can compare the effects of market volatilities on Trusval Technology and Golden Friends 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 Trusval Technology with a short position of Golden Friends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trusval Technology and Golden Friends.
Diversification Opportunities for Trusval Technology and Golden Friends
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trusval and Golden is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Trusval Technology Co and Golden Friends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Friends and Trusval Technology 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 Trusval Technology Co are associated (or correlated) with Golden Friends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Friends has no effect on the direction of Trusval Technology i.e., Trusval Technology and Golden Friends go up and down completely randomly.
Pair Corralation between Trusval Technology and Golden Friends
Assuming the 90 days trading horizon Trusval Technology Co is expected to generate 2.56 times more return on investment than Golden Friends. However, Trusval Technology is 2.56 times more volatile than Golden Friends. It trades about 0.1 of its potential returns per unit of risk. Golden Friends is currently generating about 0.07 per unit of risk. If you would invest 7,640 in Trusval Technology Co on August 29, 2024 and sell it today you would earn a total of 10,760 from holding Trusval Technology Co or generate 140.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trusval Technology Co vs. Golden Friends
Performance |
| Timeline |
| Trusval Technology |
| Golden Friends |
Trusval Technology and Golden Friends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trusval Technology and Golden Friends
The main advantage of trading using opposite Trusval Technology and Golden Friends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trusval Technology position performs unexpectedly, Golden Friends 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 Friends will offset losses from the drop in Golden Friends' long position.| Trusval Technology vs. Golden Friends | Trusval Technology vs. Sunonwealth Electric Machine | Trusval Technology vs. Rechi Precision Co | Trusval Technology vs. Fittech Co |
| Golden Friends vs. Charoen Pokphand Enterprise | Golden Friends vs. Taiwan Sakura Corp | Golden Friends vs. Great Wall Enterprise | Golden Friends vs. TTET Union 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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