Correlation Between TKB Critical and Golden Star
Can any of the company-specific risk be diversified away by investing in both TKB Critical 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 TKB Critical and Golden Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKB Critical Technologies and Golden Star Acquisition, you can compare the effects of market volatilities on TKB Critical 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 TKB Critical with a short position of Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKB Critical and Golden Star.
Diversification Opportunities for TKB Critical and Golden Star
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between TKB and Golden is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies 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 TKB Critical 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 TKB Critical Technologies 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 TKB Critical i.e., TKB Critical and Golden Star go up and down completely randomly.
Pair Corralation between TKB Critical and Golden Star
Assuming the 90 days horizon TKB Critical Technologies is expected to generate 8.38 times more return on investment than Golden Star. However, TKB Critical is 8.38 times more volatile than Golden Star Acquisition. It trades about 0.04 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 1,038 in TKB Critical Technologies on August 28, 2024 and sell it today you would earn a total of 53.00 from holding TKB Critical Technologies or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
TKB Critical Technologies vs. Golden Star Acquisition
Performance |
| Timeline |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Golden Star Acquisition |
TKB Critical and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKB Critical and Golden Star
The main advantage of trading using opposite TKB Critical and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKB Critical 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.| TKB Critical vs. American Axle Manufacturing | TKB Critical vs. Cars Inc | TKB Critical vs. Viemed Healthcare | TKB Critical vs. Magna International |
| Golden Star vs. Aurora Innovation | Golden Star vs. HUMANA INC | Golden Star vs. Aquagold International | Golden Star vs. Barloworld Ltd ADR |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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