Correlation Between Giantec Semiconductor and Beijing Yanjing

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

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

Diversification Opportunities for Giantec Semiconductor and Beijing Yanjing

0.35

Correlation Coefficient

Giantec Semiconductor  Beijing Yanjing

Weak diversification

The 3 months correlation between Giantec and Beijing is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and Giantec 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 Giantec Semiconductor Corp are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and Beijing Yanjing go up and down completely randomly.

Pair Corralation between Giantec Semiconductor and Beijing Yanjing

Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to under-perform the Beijing Yanjing. In addition to that, Giantec Semiconductor is 2.05 times more volatile than Beijing Yanjing Brewery. It trades about -0.01 of its total potential returns per unit of risk. Beijing Yanjing Brewery is currently generating about 0.42 per unit of volatility. If you would invest  1,016  in Beijing Yanjing Brewery on October 6, 2024 and sell it today you would earn a total of  159.00  from holding Beijing Yanjing Brewery or generate 15.65% return on investment over 90 days.

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

Giantec Semiconductor Corp  vs.  Beijing Yanjing Brewery

Giantec Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Giantec Semiconductor Corp 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.

Beijing Yanjing Brewery

Risk-Adjusted Performance

4 of 100

Modest

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

Pair Trading with Giantec Semiconductor and Beijing Yanjing

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

The idea behind Giantec Semiconductor Corp and Beijing Yanjing Brewery 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.