Correlation Between Golden Biotechnology and Hung Chou
Can any of the company-specific risk be diversified away by investing in both Golden Biotechnology and Hung Chou 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 Golden Biotechnology and Hung Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Biotechnology and Hung Chou Fiber, you can compare the effects of market volatilities on Golden Biotechnology and Hung Chou 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 Golden Biotechnology with a short position of Hung Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Biotechnology and Hung Chou.
Diversification Opportunities for Golden Biotechnology and Hung Chou
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Hung is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Golden Biotechnology and Hung Chou Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hung Chou Fiber and Golden Biotechnology 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 Golden Biotechnology are associated (or correlated) with Hung Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hung Chou Fiber has no effect on the direction of Golden Biotechnology i.e., Golden Biotechnology and Hung Chou go up and down completely randomly.
Pair Corralation between Golden Biotechnology and Hung Chou
Assuming the 90 days trading horizon Golden Biotechnology is expected to under-perform the Hung Chou. In addition to that, Golden Biotechnology is 1.72 times more volatile than Hung Chou Fiber. It trades about -0.1 of its total potential returns per unit of risk. Hung Chou Fiber is currently generating about 0.07 per unit of volatility. If you would invest 902.00 in Hung Chou Fiber on December 2, 2024 and sell it today you would earn a total of 303.00 from holding Hung Chou Fiber or generate 33.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Golden Biotechnology vs. Hung Chou Fiber
Performance |
Timeline |
Golden Biotechnology |
Hung Chou Fiber |
Golden Biotechnology and Hung Chou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Biotechnology and Hung Chou
The main advantage of trading using opposite Golden Biotechnology and Hung Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Biotechnology position performs unexpectedly, Hung Chou 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 Hung Chou will offset losses from the drop in Hung Chou's long position.Golden Biotechnology vs. Delpha Construction Co | Golden Biotechnology vs. Lian Hwa Foods | Golden Biotechnology vs. Chiu Ting Machinery | Golden Biotechnology vs. Shinkong Insurance Co |
Hung Chou vs. WIN Semiconductors | Hung Chou vs. Holtek Semiconductor | Hung Chou vs. Asmedia Technology | Hung Chou vs. Realtek Semiconductor Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |