Correlation Between XiAn Dagang and Giantec Semiconductor

Can any of the company-specific risk be diversified away by investing in both XiAn Dagang and Giantec Semiconductor 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 XiAn Dagang and Giantec Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XiAn Dagang Road and Giantec Semiconductor Corp, you can compare the effects of market volatilities on XiAn Dagang and Giantec Semiconductor 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 XiAn Dagang with a short position of Giantec Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of XiAn Dagang and Giantec Semiconductor.

Diversification Opportunities for XiAn Dagang and Giantec Semiconductor

-0.05

Correlation Coefficient

XiAn Dagang  Giantec Semiconductor

Good diversification

The 3 months correlation between XiAn and Giantec is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding XiAn Dagang Road and Giantec Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giantec Semiconductor and XiAn Dagang 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 XiAn Dagang Road are associated (or correlated) with Giantec Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giantec Semiconductor has no effect on the direction of XiAn Dagang i.e., XiAn Dagang and Giantec Semiconductor go up and down completely randomly.

Pair Corralation between XiAn Dagang and Giantec Semiconductor

Assuming the 90 days trading horizon XiAn Dagang is expected to generate 1.26 times less return on investment than Giantec Semiconductor. But when comparing it to its historical volatility, XiAn Dagang Road is 1.1 times less risky than Giantec Semiconductor. It trades about 0.02 of its potential returns per unit of risk. Giantec Semiconductor Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,255  in Giantec Semiconductor Corp on October 23, 2024 and sell it today you would lose (392.00) from holding Giantec Semiconductor Corp or give up 5.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

XiAn Dagang Road  vs.  Giantec Semiconductor Corp

XiAn Dagang Road

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XiAn Dagang Road has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Giantec Semiconductor

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Giantec Semiconductor Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Giantec Semiconductor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with XiAn Dagang and Giantec Semiconductor

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

The idea behind XiAn Dagang Road and Giantec Semiconductor Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.