Correlation Between GRINM Semiconductor and Jiangsu Changhai

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

By analyzing existing cross correlation between GRINM Semiconductor Materials and Jiangsu Changhai Compos, you can compare the effects of market volatilities on GRINM Semiconductor and Jiangsu Changhai 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 GRINM Semiconductor with a short position of Jiangsu Changhai. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRINM Semiconductor and Jiangsu Changhai.

Diversification Opportunities for GRINM Semiconductor and Jiangsu Changhai

0.91

Correlation Coefficient

GRINM Semiconductor  Jiangsu Changhai

Almost no diversification

The 3 months correlation between GRINM and Jiangsu is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Jiangsu Changhai Compos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Changhai Compos and GRINM 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 GRINM Semiconductor Materials are associated (or correlated) with Jiangsu Changhai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Changhai Compos has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Jiangsu Changhai go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and Jiangsu Changhai

Assuming the 90 days trading horizon GRINM Semiconductor Materials is expected to under-perform the Jiangsu Changhai. In addition to that, GRINM Semiconductor is 1.38 times more volatile than Jiangsu Changhai Compos. It trades about -0.09 of its total potential returns per unit of risk. Jiangsu Changhai Compos is currently generating about -0.1 per unit of volatility. If you would invest  1,173  in Jiangsu Changhai Compos on October 25, 2024 and sell it today you would lose (148.00) from holding Jiangsu Changhai Compos or give up 12.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

GRINM Semiconductor Materials  vs.  Jiangsu Changhai Compos

GRINM Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRINM Semiconductor Materials 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.

Jiangsu Changhai Compos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Changhai Compos 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 GRINM Semiconductor and Jiangsu Changhai

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

The idea behind GRINM Semiconductor Materials and Jiangsu Changhai Compos 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.