Correlation Between Will Semiconductor and Guangdong Jingyi

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

By analyzing existing cross correlation between Will Semiconductor Co and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Will Semiconductor and Guangdong Jingyi 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 Will Semiconductor with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Will Semiconductor and Guangdong Jingyi.

Diversification Opportunities for Will Semiconductor and Guangdong Jingyi

-0.54

Correlation Coefficient

Will Semiconductor  Guangdong Jingyi

Excellent diversification

The 3 months correlation between Will and Guangdong is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Will Semiconductor Co and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Will Semiconductor 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 Will Semiconductor Co are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Will Semiconductor i.e., Will Semiconductor and Guangdong Jingyi go up and down completely randomly.

Pair Corralation between Will Semiconductor and Guangdong Jingyi

Assuming the 90 days trading horizon Will Semiconductor Co is expected to generate 0.72 times more return on investment than Guangdong Jingyi. However, Will Semiconductor Co is 1.39 times less risky than Guangdong Jingyi. It trades about 0.02 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.0 per unit of risk. If you would invest  9,300  in Will Semiconductor Co on October 4, 2024 and sell it today you would earn a total of  758.00  from holding Will Semiconductor Co or generate 8.15% return on investment over 90 days.

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

Will Semiconductor Co  vs.  Guangdong Jingyi Metal

Will Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Will Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Guangdong Jingyi Metal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Jingyi Metal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guangdong Jingyi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Will Semiconductor and Guangdong Jingyi

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

The idea behind Will Semiconductor Co and Guangdong Jingyi Metal 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.