Correlation Between GRINM Semiconductor and Minmetals Capital

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

Diversification Opportunities for GRINM Semiconductor and Minmetals Capital

0.92

Correlation Coefficient

GRINM Semiconductor  Minmetals Capital

Almost no diversification

The 3 months correlation between GRINM and Minmetals is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Minmetals Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minmetals Capital 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 Minmetals Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minmetals Capital has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Minmetals Capital go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and Minmetals Capital

Assuming the 90 days trading horizon GRINM Semiconductor Materials is expected to generate 1.0 times more return on investment than Minmetals Capital. However, GRINM Semiconductor is 1.0 times more volatile than Minmetals Capital Co. It trades about 0.06 of its potential returns per unit of risk. Minmetals Capital Co is currently generating about -0.04 per unit of risk. If you would invest  1,184  in GRINM Semiconductor Materials on September 26, 2024 and sell it today you would earn a total of  25.00  from holding GRINM Semiconductor Materials or generate 2.11% return on investment over 90 days.

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

GRINM Semiconductor Materials  vs.  Minmetals Capital Co

GRINM Semiconductor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRINM Semiconductor Materials are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GRINM Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.

Minmetals Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minmetals Capital Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Minmetals Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRINM Semiconductor and Minmetals Capital

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

The idea behind GRINM Semiconductor Materials and Minmetals Capital Co 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.