Correlation Between Giantec Semiconductor and Ningbo Ligong

Can any of the company-specific risk be diversified away by investing in both Giantec Semiconductor and Ningbo Ligong 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 Ningbo Ligong 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 Ningbo Ligong Online, you can compare the effects of market volatilities on Giantec Semiconductor and Ningbo Ligong 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 Ningbo Ligong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giantec Semiconductor and Ningbo Ligong.

Diversification Opportunities for Giantec Semiconductor and Ningbo Ligong

-0.11

Correlation Coefficient

Giantec Semiconductor  Ningbo Ligong

Good diversification

The 3 months correlation between Giantec and Ningbo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and Ningbo Ligong Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Ligong Online 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 Ningbo Ligong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Ligong Online has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and Ningbo Ligong go up and down completely randomly.

Pair Corralation between Giantec Semiconductor and Ningbo Ligong

Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to generate 1.85 times more return on investment than Ningbo Ligong. However, Giantec Semiconductor is 1.85 times more volatile than Ningbo Ligong Online. It trades about 0.06 of its potential returns per unit of risk. Ningbo Ligong Online is currently generating about -0.08 per unit of risk. If you would invest  6,431  in Giantec Semiconductor Corp on October 25, 2024 and sell it today you would earn a total of  689.00  from holding Giantec Semiconductor Corp or generate 10.71% return on investment over 90 days.

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

Giantec Semiconductor Corp  vs.  Ningbo Ligong Online

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 sustained solid returns over the last few months and may actually be approaching a breakup point.

Ningbo Ligong Online

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ningbo Ligong Online 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.

Pair Trading with Giantec Semiconductor and Ningbo Ligong

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

The idea behind Giantec Semiconductor Corp and Ningbo Ligong Online 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.