Correlation Between PChome Online and Gold Rain
Can any of the company-specific risk be diversified away by investing in both PChome Online and Gold Rain 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 PChome Online and Gold Rain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and Gold Rain Enterprises, you can compare the effects of market volatilities on PChome Online and Gold Rain 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 PChome Online with a short position of Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and Gold Rain.
Diversification Opportunities for PChome Online and Gold Rain
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PChome and Gold is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises and PChome Online 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 PChome Online are associated (or correlated) with Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of PChome Online i.e., PChome Online and Gold Rain go up and down completely randomly.
Pair Corralation between PChome Online and Gold Rain
Assuming the 90 days trading horizon PChome Online is expected to under-perform the Gold Rain. But the stock apears to be less risky and, when comparing its historical volatility, PChome Online is 1.3 times less risky than Gold Rain. The stock trades about -0.04 of its potential returns per unit of risk. The Gold Rain Enterprises is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,900 in Gold Rain Enterprises on October 29, 2024 and sell it today you would earn a total of 590.00 from holding Gold Rain Enterprises or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. Gold Rain Enterprises
Performance |
| Timeline |
| PChome Online |
| Gold Rain Enterprises |
PChome Online and Gold Rain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and Gold Rain
The main advantage of trading using opposite PChome Online and Gold Rain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online position performs unexpectedly, Gold Rain 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 Gold Rain will offset losses from the drop in Gold Rain's long position.| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
| Gold Rain vs. Niko Semiconductor Co | Gold Rain vs. PChome Online | Gold Rain vs. Advanced Wireless Semiconductor | Gold Rain vs. Vanguard International Semiconductor |
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 Stocks Directory module to find actively traded stocks across global markets.
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