Correlation Between Hunan Mendale and GigaDevice SemiconductorBei

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Can any of the company-specific risk be diversified away by investing in both Hunan Mendale and GigaDevice SemiconductorBei 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 Hunan Mendale and GigaDevice SemiconductorBei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunan Mendale Hometextile and GigaDevice SemiconductorBeiji, you can compare the effects of market volatilities on Hunan Mendale and GigaDevice SemiconductorBei 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 Hunan Mendale with a short position of GigaDevice SemiconductorBei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and GigaDevice SemiconductorBei.

Diversification Opportunities for Hunan Mendale and GigaDevice SemiconductorBei

HunanGigaDeviceDiversified AwayHunanGigaDeviceDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Hunan and GigaDevice is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and GigaDevice SemiconductorBeiji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaDevice SemiconductorBei and Hunan Mendale 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 Hunan Mendale Hometextile are associated (or correlated) with GigaDevice SemiconductorBei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaDevice SemiconductorBei has no effect on the direction of Hunan Mendale i.e., Hunan Mendale and GigaDevice SemiconductorBei go up and down completely randomly.

Pair Corralation between Hunan Mendale and GigaDevice SemiconductorBei

Assuming the 90 days trading horizon Hunan Mendale is expected to generate 1.25 times less return on investment than GigaDevice SemiconductorBei. In addition to that, Hunan Mendale is 1.28 times more volatile than GigaDevice SemiconductorBeiji. It trades about 0.12 of its total potential returns per unit of risk. GigaDevice SemiconductorBeiji is currently generating about 0.18 per unit of volatility. If you would invest  8,992  in GigaDevice SemiconductorBeiji on October 21, 2024 and sell it today you would earn a total of  4,487  from holding GigaDevice SemiconductorBeiji or generate 49.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hunan Mendale Hometextile  vs.  GigaDevice SemiconductorBeiji

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 020406080
JavaScript chart by amCharts 3.21.15002397 603986
       Timeline  
Hunan Mendale Hometextile 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan Mendale Hometextile are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan Mendale sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2.533.544.5
GigaDevice SemiconductorBei 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GigaDevice SemiconductorBeiji are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GigaDevice SemiconductorBei sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan90100110120130

Hunan Mendale and GigaDevice SemiconductorBei Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.73-11.03-7.33-3.640.06163.787.6911.615.5119.41 0.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15002397 603986
       Returns  

Pair Trading with Hunan Mendale and GigaDevice SemiconductorBei

The main advantage of trading using opposite Hunan Mendale and GigaDevice SemiconductorBei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale position performs unexpectedly, GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBei will offset losses from the drop in GigaDevice SemiconductorBei's long position.
The idea behind Hunan Mendale Hometextile and GigaDevice SemiconductorBeiji 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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