Correlation Between GigaDevice SemiconductorBei and Everjoy Health

Can any of the company-specific risk be diversified away by investing in both GigaDevice SemiconductorBei and Everjoy Health 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 GigaDevice SemiconductorBei and Everjoy Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Everjoy Health Group, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Everjoy Health 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 GigaDevice SemiconductorBei with a short position of Everjoy Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Everjoy Health.

Diversification Opportunities for GigaDevice SemiconductorBei and Everjoy Health

0.73

Correlation Coefficient

GigaDevice SemiconductorBei  Everjoy Health

Poor diversification

The 3 months correlation between GigaDevice and Everjoy is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Everjoy Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everjoy Health Group and GigaDevice SemiconductorBei 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 GigaDevice SemiconductorBeiji are associated (or correlated) with Everjoy Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everjoy Health Group has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Everjoy Health go up and down completely randomly.

Pair Corralation between GigaDevice SemiconductorBei and Everjoy Health

Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to generate 1.04 times more return on investment than Everjoy Health. However, GigaDevice SemiconductorBei is 1.04 times more volatile than Everjoy Health Group. It trades about 0.3 of its potential returns per unit of risk. Everjoy Health Group is currently generating about 0.17 per unit of risk. If you would invest  8,831  in GigaDevice SemiconductorBeiji on September 21, 2024 and sell it today you would earn a total of  2,489  from holding GigaDevice SemiconductorBeiji or generate 28.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GigaDevice SemiconductorBeiji  vs.  Everjoy Health Group

GigaDevice SemiconductorBei

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GigaDevice SemiconductorBeiji are ranked lower than 19 (%) 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.

Everjoy Health Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everjoy Health Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Everjoy Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GigaDevice SemiconductorBei and Everjoy Health

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

The idea behind GigaDevice SemiconductorBeiji and Everjoy Health Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.