Correlation Between GRINM Semiconductor and JCHX Mining

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

Diversification Opportunities for GRINM Semiconductor and JCHX Mining

0.36

Correlation Coefficient

GRINM Semiconductor  JCHX Mining

Weak diversification

The 3 months correlation between GRINM and JCHX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and JCHX Mining Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCHX Mining Management 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 JCHX Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCHX Mining Management has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and JCHX Mining go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and JCHX Mining

Assuming the 90 days trading horizon GRINM Semiconductor Materials is expected to generate 1.43 times more return on investment than JCHX Mining. However, GRINM Semiconductor is 1.43 times more volatile than JCHX Mining Management. It trades about 0.15 of its potential returns per unit of risk. JCHX Mining Management is currently generating about 0.1 per unit of risk. If you would invest  875.00  in GRINM Semiconductor Materials on September 13, 2024 and sell it today you would earn a total of  378.00  from holding GRINM Semiconductor Materials or generate 43.2% return on investment over 90 days.

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

GRINM Semiconductor Materials  vs.  JCHX Mining Management

GRINM Semiconductor

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GRINM Semiconductor Materials are ranked lower than 12 (%) 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.

JCHX Mining Management

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with GRINM Semiconductor and JCHX Mining

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

The idea behind GRINM Semiconductor Materials and JCHX Mining Management 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..