Correlation Between GS Retail and Golden Bridge

Can any of the company-specific risk be diversified away by investing in both GS Retail and Golden Bridge 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 GS Retail and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GS Retail Co and Golden Bridge Investment, you can compare the effects of market volatilities on GS Retail and Golden Bridge 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 GS Retail with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Golden Bridge.

Diversification Opportunities for GS Retail and Golden Bridge

0.28

Correlation Coefficient

GS Retail  Golden Bridge

Modest diversification

The 3 months correlation between 007070 and Golden is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and GS Retail 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 GS Retail Co are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of GS Retail i.e., GS Retail and Golden Bridge go up and down completely randomly.

Pair Corralation between GS Retail and Golden Bridge

Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Golden Bridge. In addition to that, GS Retail is 1.69 times more volatile than Golden Bridge Investment. It trades about -0.15 of its total potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.01 per unit of volatility. If you would invest  42,600  in Golden Bridge Investment on December 24, 2024 and sell it today you would lose (300.00) from holding Golden Bridge Investment or give up 0.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GS Retail Co  vs.  Golden Bridge Investment

GS Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days GS Retail Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Golden Bridge Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Bridge Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Golden Bridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GS Retail and Golden Bridge

The main advantage of trading using opposite GS Retail and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Golden Bridge 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 Bridge will offset losses from the drop in Golden Bridge's long position.

The idea behind GS Retail Co and Golden Bridge Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.