Correlation Between Church Dwight and Golden Star
Can any of the company-specific risk be diversified away by investing in both Church Dwight 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 Church Dwight and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and Golden Star Acquisition, you can compare the effects of market volatilities on Church Dwight 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 Church Dwight with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Golden Star.
Diversification Opportunities for Church Dwight and Golden Star
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Church and Golden is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight 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 Church Dwight 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 Church Dwight 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 Church Dwight i.e., Church Dwight and Golden Star go up and down completely randomly.
Pair Corralation between Church Dwight and Golden Star
Considering the 90-day investment horizon Church Dwight is expected to generate 0.61 times more return on investment than Golden Star. However, Church Dwight is 1.65 times less risky than Golden Star. It trades about 0.07 of its potential returns per unit of risk. Golden Star Acquisition is currently generating about 0.03 per unit of risk. If you would invest 9,312 in Church Dwight on September 2, 2024 and sell it today you would earn a total of 1,701 from holding Church Dwight or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Church Dwight vs. Golden Star Acquisition
Performance |
| Timeline |
| Church Dwight |
| Golden Star Acquisition |
Church Dwight and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and Golden Star
The main advantage of trading using opposite Church Dwight and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight 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.| Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Kimberly Clark | Church Dwight vs. Estee Lauder Companies |
| Golden Star vs. Church Dwight | Golden Star vs. Precision Drilling | Golden Star vs. Tenaris SA ADR | Golden Star vs. ServiceNow |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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