Correlation Between Goldsun Building and Aker Technology

Can any of the company-specific risk be diversified away by investing in both Goldsun Building and Aker 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 Aker 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 Aker Technology Co, you can compare the effects of market volatilities on Goldsun Building and Aker 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 Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldsun Building and Aker Technology.

Diversification Opportunities for Goldsun Building and Aker Technology

-0.18

Correlation Coefficient

Goldsun Building  Aker Technology

Good diversification

The 3 months correlation between Goldsun and Aker is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Goldsun Building Materials and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker 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 Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Goldsun Building i.e., Goldsun Building and Aker Technology go up and down completely randomly.

Pair Corralation between Goldsun Building and Aker Technology

Assuming the 90 days trading horizon Goldsun Building Materials is expected to under-perform the Aker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Goldsun Building Materials is 1.01 times less risky than Aker Technology. The stock trades about -0.24 of its potential returns per unit of risk. The Aker Technology Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  2,530  in Aker Technology Co on October 11, 2024 and sell it today you would lose (330.00) from holding Aker Technology Co or give up 13.04% of portfolio value over 90 days.

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

Goldsun Building Materials  vs.  Aker 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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Aker Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aker Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aker Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goldsun Building and Aker Technology

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

The idea behind Goldsun Building Materials and Aker 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 Global Correlations module to find global opportunities by holding instruments from different markets.