Correlation Between Arbor Realty and Golden Star
Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Golden Star 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 Arbor Realty and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Realty Trust and Golden Star Acquisition, you can compare the effects of market volatilities on Arbor Realty and Golden Star 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 Arbor Realty with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Golden Star.
Diversification Opportunities for Arbor Realty and Golden Star
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arbor and Golden is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star Acquisition and Arbor Realty 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 Arbor Realty Trust are associated (or correlated) with Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Arbor Realty i.e., Arbor Realty and Golden Star go up and down completely randomly.
Pair Corralation between Arbor Realty and Golden Star
Considering the 90-day investment horizon Arbor Realty Trust is expected to under-perform the Golden Star. But the stock apears to be less risky and, when comparing its historical volatility, Arbor Realty Trust is 1.5 times less risky than Golden Star. The stock trades about 0.0 of its potential returns per unit of risk. The Golden Star Acquisition is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,124 in Golden Star Acquisition on October 24, 2024 and sell it today you would earn a total of 146.00 from holding Golden Star Acquisition or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Realty Trust vs. Golden Star Acquisition
Performance |
| Timeline |
| Arbor Realty Trust |
| Golden Star Acquisition |
Arbor Realty and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and Golden Star
The main advantage of trading using opposite Arbor Realty and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Golden Star 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 Star will offset losses from the drop in Golden Star's long position.| Arbor Realty vs. Starwood Property Trust | Arbor Realty vs. Ready Capital Corp | Arbor Realty vs. Two Harbors Investments | Arbor Realty vs. AGNC Investment Corp |
| Golden Star vs. Integral Ad Science | Golden Star vs. Aldel Financial II | Golden Star vs. Marchex | Golden Star vs. ZhongAn Online P |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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