Correlation Between Golden Agri and Disney
Can any of the company-specific risk be diversified away by investing in both Golden Agri and Disney 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 Golden Agri and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Agri Resources and Walt Disney, you can compare the effects of market volatilities on Golden Agri and Disney 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 Golden Agri with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri and Disney.
Diversification Opportunities for Golden Agri and Disney
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Golden and Disney is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Golden Agri 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 Golden Agri Resources are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Golden Agri i.e., Golden Agri and Disney go up and down completely randomly.
Pair Corralation between Golden Agri and Disney
Assuming the 90 days horizon Golden Agri Resources is expected to generate 3.67 times more return on investment than Disney. However, Golden Agri is 3.67 times more volatile than Walt Disney. It trades about 0.03 of its potential returns per unit of risk. Walt Disney is currently generating about 0.04 per unit of risk. If you would invest 20.00 in Golden Agri Resources on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Golden Agri Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.05% |
| Values | Daily Returns |
Golden Agri Resources vs. Walt Disney
Performance |
| Timeline |
| Golden Agri Resources |
| Walt Disney |
Golden Agri and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri and Disney
The main advantage of trading using opposite Golden Agri and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Golden Agri vs. Wilmar International | Golden Agri vs. SLC Agricola SA | Golden Agri vs. Brasilagro Adr | Golden Agri vs. Alico Inc |
| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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