Correlation Between GRINM Semiconductor and Ningbo Jintian

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

Diversification Opportunities for GRINM Semiconductor and Ningbo Jintian

0.79

Correlation Coefficient

GRINM Semiconductor  Ningbo Jintian

Poor diversification

The 3 months correlation between GRINM and Ningbo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Ningbo Jintian Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jintian Copper 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 Ningbo Jintian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jintian Copper has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Ningbo Jintian go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and Ningbo Jintian

Assuming the 90 days trading horizon GRINM Semiconductor is expected to generate 4.2 times less return on investment than Ningbo Jintian. In addition to that, GRINM Semiconductor is 1.77 times more volatile than Ningbo Jintian Copper. It trades about 0.01 of its total potential returns per unit of risk. Ningbo Jintian Copper is currently generating about 0.11 per unit of volatility. If you would invest  610.00  in Ningbo Jintian Copper on December 25, 2024 and sell it today you would earn a total of  56.00  from holding Ningbo Jintian Copper or generate 9.18% return on investment over 90 days.

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

GRINM Semiconductor Materials  vs.  Ningbo Jintian Copper

GRINM Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRINM Semiconductor Materials are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GRINM Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ningbo Jintian Copper

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ningbo Jintian Copper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ningbo Jintian may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GRINM Semiconductor and Ningbo Jintian

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

The idea behind GRINM Semiconductor Materials and Ningbo Jintian Copper 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.