Correlation Between GRINM Semiconductor and Yantai North

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

Diversification Opportunities for GRINM Semiconductor and Yantai North

0.66

Correlation Coefficient

GRINM Semiconductor  Yantai North

Poor diversification

The 3 months correlation between GRINM and Yantai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Yantai North Andre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai North Andre 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 Yantai North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai North Andre has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Yantai North go up and down completely randomly.

Pair Corralation between GRINM Semiconductor and Yantai North

Assuming the 90 days trading horizon GRINM Semiconductor is expected to generate 7.45 times less return on investment than Yantai North. In addition to that, GRINM Semiconductor is 1.62 times more volatile than Yantai North Andre. It trades about 0.02 of its total potential returns per unit of risk. Yantai North Andre is currently generating about 0.28 per unit of volatility. If you would invest  2,812  in Yantai North Andre on December 30, 2024 and sell it today you would earn a total of  834.00  from holding Yantai North Andre or generate 29.66% 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.  Yantai North Andre

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.

Yantai North Andre

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yantai North Andre are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yantai North sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRINM Semiconductor and Yantai North

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

The idea behind GRINM Semiconductor Materials and Yantai North Andre 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.