Correlation Between Golden Star and TKB Critical
Can any of the company-specific risk be diversified away by investing in both Golden Star and TKB Critical 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 Star and TKB Critical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Star Acquisition and TKB Critical Technologies, you can compare the effects of market volatilities on Golden Star and TKB Critical 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 Star with a short position of TKB Critical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Star and TKB Critical.
Diversification Opportunities for Golden Star and TKB Critical
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and TKB is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Golden Star Acquisition and TKB Critical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKB Critical Technologies and Golden Star 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 Star Acquisition are associated (or correlated) with TKB Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKB Critical Technologies has no effect on the direction of Golden Star i.e., Golden Star and TKB Critical go up and down completely randomly.
Pair Corralation between Golden Star and TKB Critical
Assuming the 90 days horizon Golden Star is expected to generate 11.56 times less return on investment than TKB Critical. But when comparing it to its historical volatility, Golden Star Acquisition is 8.62 times less risky than TKB Critical. It trades about 0.03 of its potential returns per unit of risk. TKB Critical Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,030 in TKB Critical Technologies on August 28, 2024 and sell it today you would earn a total of 61.00 from holding TKB Critical Technologies or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.9% |
| Values | Daily Returns |
Golden Star Acquisition vs. TKB Critical Technologies
Performance |
| Timeline |
| Golden Star Acquisition |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Golden Star and TKB Critical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Star and TKB Critical
The main advantage of trading using opposite Golden Star and TKB Critical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Star position performs unexpectedly, TKB Critical 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 TKB Critical will offset losses from the drop in TKB Critical's long position.| Golden Star vs. Aurora Innovation | Golden Star vs. HUMANA INC | Golden Star vs. Aquagold International | Golden Star vs. Barloworld Ltd ADR |
| TKB Critical vs. American Axle Manufacturing | TKB Critical vs. Cars Inc | TKB Critical vs. Viemed Healthcare | TKB Critical vs. Magna International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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