Correlation Between Gold Bond and Buff Technologies
Can any of the company-specific risk be diversified away by investing in both Gold Bond and Buff Technologies 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 Gold Bond and Buff Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bond and Buff Technologies, you can compare the effects of market volatilities on Gold Bond and Buff Technologies 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 Gold Bond with a short position of Buff Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bond and Buff Technologies.
Diversification Opportunities for Gold Bond and Buff Technologies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gold and Buff is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bond and Buff Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buff Technologies and Gold Bond 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 The Gold Bond are associated (or correlated) with Buff Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buff Technologies has no effect on the direction of Gold Bond i.e., Gold Bond and Buff Technologies go up and down completely randomly.
Pair Corralation between Gold Bond and Buff Technologies
Assuming the 90 days trading horizon The Gold Bond is expected to generate 0.71 times more return on investment than Buff Technologies. However, The Gold Bond is 1.4 times less risky than Buff Technologies. It trades about 0.24 of its potential returns per unit of risk. Buff Technologies is currently generating about -0.51 per unit of risk. If you would invest 1,380,000 in The Gold Bond on September 1, 2024 and sell it today you would earn a total of 92,000 from holding The Gold Bond or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
The Gold Bond vs. Buff Technologies
Performance |
| Timeline |
| Gold Bond |
| Buff Technologies |
Gold Bond and Buff Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bond and Buff Technologies
The main advantage of trading using opposite Gold Bond and Buff Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bond position performs unexpectedly, Buff Technologies 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 Buff Technologies will offset losses from the drop in Buff Technologies' long position.| Gold Bond vs. Big Shopping Centers | Gold Bond vs. Al Bad Massuot Yitzhak | Gold Bond vs. Harel Insurance Investments | Gold Bond vs. Palram |
| Buff Technologies vs. Mivtach Shamir | Buff Technologies vs. Lesico | Buff Technologies vs. Tower Semiconductor | Buff Technologies vs. El Al Israel |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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