Correlation Between Golden Agri-Resources and Empire State
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Empire State 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-Resources and Empire State 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 Empire State Realty, you can compare the effects of market volatilities on Golden Agri-Resources and Empire State 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-Resources with a short position of Empire State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Empire State.
Diversification Opportunities for Golden Agri-Resources and Empire State
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Empire is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty and Golden Agri-Resources 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 Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Empire State go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Empire State
Assuming the 90 days horizon Golden Agri Resources is expected to generate 2.77 times more return on investment than Empire State. However, Golden Agri-Resources is 2.77 times more volatile than Empire State Realty. It trades about 0.03 of its potential returns per unit of risk. Empire State Realty is currently generating about 0.06 per unit of risk. If you would invest 20.00 in Golden Agri Resources on September 2, 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 | Weak |
| Accuracy | 65.12% |
| Values | Daily Returns |
Golden Agri Resources vs. Empire State Realty
Performance |
| Timeline |
| Golden Agri Resources |
| Empire State Realty |
Golden Agri-Resources and Empire State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and Empire State
The main advantage of trading using opposite Golden Agri-Resources and Empire State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Empire State 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 Empire State will offset losses from the drop in Empire State's long position.| Golden Agri-Resources vs. Artisan Consumer Goods | Golden Agri-Resources vs. Altavoz Entertainment | Golden Agri-Resources vs. Avi Ltd ADR | Golden Agri-Resources vs. Aryzta AG PK |
| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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