Correlation Between Goldsun Building and Amtran Technology

Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Amtran Technology 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 Goldsun Building and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldsun Building Materials and Amtran Technology Co, you can compare the effects of market volatilities on Goldsun Building and Amtran Technology 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 Goldsun Building with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Amtran Technology.

Diversification Opportunities for Goldsun Building and Amtran Technology

0.73

Correlation Coefficient

Goldsun Building  Amtran Technology

Poor diversification

The 3 months correlation between Goldsun and Amtran is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Goldsun Building 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 Goldsun Building Materials are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Goldsun Building i.e., Goldsun Building and Amtran Technology go up and down completely randomly.

Pair Corralation between Goldsun Building and Amtran Technology

Assuming the 90 days trading horizon Goldsun Building Materials is expected to generate 1.58 times more return on investment than Amtran Technology. However, Goldsun Building is 1.58 times more volatile than Amtran Technology Co. It trades about -0.09 of its potential returns per unit of risk. Amtran Technology Co is currently generating about -0.19 per unit of risk. If you would invest  5,270  in Goldsun Building Materials on October 25, 2024 and sell it today you would lose (830.00) from holding Goldsun Building Materials or give up 15.75% of portfolio value over 90 days.

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

Goldsun Building Materials  vs.  Amtran Technology Co

Goldsun Building Mat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldsun Building Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Amtran Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amtran Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Goldsun Building and Amtran Technology

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

The idea behind Goldsun Building Materials and Amtran Technology Co 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.