Correlation Between GRINM Semiconductor and Great Sun

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

Diversification Opportunities for GRINM Semiconductor and Great Sun

0.54

Correlation Coefficient

GRINM Semiconductor  Great Sun

Very weak diversification

The 3 months correlation between GRINM and Great is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Great Sun Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Sun Foods 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 Great Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Sun Foods has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Great Sun go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and Great Sun

Assuming the 90 days trading horizon GRINM Semiconductor Materials is expected to generate 0.86 times more return on investment than Great Sun. However, GRINM Semiconductor Materials is 1.16 times less risky than Great Sun. It trades about 0.01 of its potential returns per unit of risk. Great Sun Foods Co is currently generating about -0.01 per unit of risk. If you would invest  1,122  in GRINM Semiconductor Materials on October 6, 2024 and sell it today you would lose (68.00) from holding GRINM Semiconductor Materials or give up 6.06% of portfolio value over 90 days.

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

GRINM Semiconductor Materials  vs.  Great Sun Foods Co

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.

Great Sun Foods

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with GRINM Semiconductor and Great Sun

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

The idea behind GRINM Semiconductor Materials and Great Sun Foods 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..