Correlation Between Giantec Semiconductor and China Publishing

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

Diversification Opportunities for Giantec Semiconductor and China Publishing

-0.4

Correlation Coefficient

Giantec Semiconductor  China Publishing

Very good diversification

The 3 months correlation between Giantec and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and China Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Publishing Media 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 China Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Publishing Media has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and China Publishing go up and down completely randomly.

Pair Corralation between Giantec Semiconductor and China Publishing

Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to generate 2.29 times more return on investment than China Publishing. However, Giantec Semiconductor is 2.29 times more volatile than China Publishing Media. It trades about 0.14 of its potential returns per unit of risk. China Publishing Media is currently generating about -0.06 per unit of risk. If you would invest  6,257  in Giantec Semiconductor Corp on December 25, 2024 and sell it today you would earn a total of  2,186  from holding Giantec Semiconductor Corp or generate 34.94% return on investment over 90 days.

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

Giantec Semiconductor Corp  vs.  China Publishing Media

Giantec Semiconductor

Risk-Adjusted Performance

OK

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

China Publishing Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Publishing Media 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 China Publishing

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

The idea behind Giantec Semiconductor Corp and China Publishing Media 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.