Correlation Between GigaDevice SemiconductorBei and Ziel Home

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

By analyzing existing cross correlation between GigaDevice SemiconductorBeiji and Ziel Home Furnishing, you can compare the effects of market volatilities on GigaDevice SemiconductorBei and Ziel Home 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 Ziel Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaDevice SemiconductorBei and Ziel Home.

Diversification Opportunities for GigaDevice SemiconductorBei and Ziel Home

0.48

Correlation Coefficient

GigaDevice SemiconductorBei  Ziel Home

Very weak diversification

The 3 months correlation between GigaDevice and Ziel is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GigaDevice SemiconductorBeiji and Ziel Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziel Home Furnishing 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 Ziel Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziel Home Furnishing has no effect on the direction of GigaDevice SemiconductorBei i.e., GigaDevice SemiconductorBei and Ziel Home go up and down completely randomly.

Pair Corralation between GigaDevice SemiconductorBei and Ziel Home

Assuming the 90 days trading horizon GigaDevice SemiconductorBeiji is expected to generate 1.05 times more return on investment than Ziel Home. However, GigaDevice SemiconductorBei is 1.05 times more volatile than Ziel Home Furnishing. It trades about 0.14 of its potential returns per unit of risk. Ziel Home Furnishing is currently generating about 0.0 per unit of risk. If you would invest  8,837  in GigaDevice SemiconductorBeiji on September 28, 2024 and sell it today you would earn a total of  2,663  from holding GigaDevice SemiconductorBeiji or generate 30.13% return on investment over 90 days.

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

GigaDevice SemiconductorBeiji  vs.  Ziel Home Furnishing

GigaDevice SemiconductorBei

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GigaDevice SemiconductorBeiji are ranked lower than 11 (%) 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.

Ziel Home Furnishing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ziel Home Furnishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ziel Home is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GigaDevice SemiconductorBei and Ziel Home

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

The idea behind GigaDevice SemiconductorBeiji and Ziel Home Furnishing 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..