Correlation Between Semiconductor Manufacturing and SGSG Sciencetechnolog

Can any of the company-specific risk be diversified away by investing in both Semiconductor Manufacturing and SGSG Sciencetechnolog 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 Semiconductor Manufacturing and SGSG Sciencetechnolog into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Semiconductor Manufacturing Electronics and SGSG Sciencetechnology Co, you can compare the effects of market volatilities on Semiconductor Manufacturing and SGSG Sciencetechnolog 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 Semiconductor Manufacturing with a short position of SGSG Sciencetechnolog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and SGSG Sciencetechnolog.

Diversification Opportunities for Semiconductor Manufacturing and SGSG Sciencetechnolog

-0.33

Correlation Coefficient

Semiconductor Manufacturing  SGSG Sciencetechnolog

Very good diversification

The 3 months correlation between Semiconductor and SGSG is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing El and SGSG Sciencetechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGSG Sciencetechnology and Semiconductor Manufacturing 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 Semiconductor Manufacturing Electronics are associated (or correlated) with SGSG Sciencetechnolog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGSG Sciencetechnology has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and SGSG Sciencetechnolog go up and down completely randomly.

Pair Corralation between Semiconductor Manufacturing and SGSG Sciencetechnolog

Assuming the 90 days trading horizon Semiconductor Manufacturing Electronics is expected to generate 0.33 times more return on investment than SGSG Sciencetechnolog. However, Semiconductor Manufacturing Electronics is 3.07 times less risky than SGSG Sciencetechnolog. It trades about -0.05 of its potential returns per unit of risk. SGSG Sciencetechnology Co is currently generating about -0.04 per unit of risk. If you would invest  529.00  in Semiconductor Manufacturing Electronics on December 27, 2024 and sell it today you would lose (32.00) from holding Semiconductor Manufacturing Electronics or give up 6.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Semiconductor Manufacturing El  vs.  SGSG Sciencetechnology Co

Semiconductor Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semiconductor Manufacturing Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Semiconductor Manufacturing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SGSG Sciencetechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days SGSG Sciencetechnology Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Semiconductor Manufacturing and SGSG Sciencetechnolog

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

The idea behind Semiconductor Manufacturing Electronics and SGSG Sciencetechnology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.