Correlation Between Giantec Semiconductor and Zhejiang Yayi

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

Diversification Opportunities for Giantec Semiconductor and Zhejiang Yayi

-0.39

Correlation Coefficient

Giantec Semiconductor  Zhejiang Yayi

Very good diversification

The 3 months correlation between Giantec and Zhejiang is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal 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 Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and Zhejiang Yayi go up and down completely randomly.

Pair Corralation between Giantec Semiconductor and Zhejiang Yayi

Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to generate 2.05 times more return on investment than Zhejiang Yayi. However, Giantec Semiconductor is 2.05 times more volatile than Zhejiang Yayi Metal. It trades about 0.14 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.02 per unit of risk. If you would invest  6,257  in Giantec Semiconductor Corp on October 26, 2024 and sell it today you would earn a total of  809.00  from holding Giantec Semiconductor Corp or generate 12.93% 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.  Zhejiang Yayi Metal

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.

Zhejiang Yayi Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhejiang Yayi Metal 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 Zhejiang Yayi

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

The idea behind Giantec Semiconductor Corp and Zhejiang Yayi 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.