Correlation Between Arrow Electronics and Golden Bull

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

By analyzing existing cross correlation between Arrow Electronics and Golden Bull Limited, you can compare the effects of market volatilities on Arrow Electronics and Golden Bull 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 Arrow Electronics with a short position of Golden Bull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Golden Bull.

Diversification Opportunities for Arrow Electronics and Golden Bull

0.0

Correlation Coefficient

Arrow Electronics  Golden Bull

Pay attention - limited upside

The 3 months correlation between Arrow and Golden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Golden Bull Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bull Limited and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Golden Bull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bull Limited has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Golden Bull go up and down completely randomly.

Pair Corralation between Arrow Electronics and Golden Bull

If you would invest  0.00  in Golden Bull Limited on February 7, 2024 and sell it today you would earn a total of  0.00  from holding Golden Bull Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Arrow Electronics  vs.  Golden Bull Limited

Arrow Electronics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Electronics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Arrow Electronics showed solid returns over the last few months and may actually be approaching a breakup point.

Golden Bull Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Bull Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, Golden Bull is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arrow Electronics and Golden Bull

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

The idea behind Arrow Electronics and Golden Bull Limited 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.