Correlation Between Semiconductor Manufacturing and Kunshan Guoli

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

Diversification Opportunities for Semiconductor Manufacturing and Kunshan Guoli

0.52

Correlation Coefficient

Semiconductor Manufacturing  Kunshan Guoli

Very weak diversification

The 3 months correlation between Semiconductor and Kunshan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing El and Kunshan Guoli Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunshan Guoli Electronic 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 Kunshan Guoli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunshan Guoli Electronic has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and Kunshan Guoli go up and down completely randomly.

Pair Corralation between Semiconductor Manufacturing and Kunshan Guoli

Assuming the 90 days trading horizon Semiconductor Manufacturing Electronics is expected to under-perform the Kunshan Guoli. But the stock apears to be less risky and, when comparing its historical volatility, Semiconductor Manufacturing Electronics is 1.41 times less risky than Kunshan Guoli. The stock trades about -0.12 of its potential returns per unit of risk. The Kunshan Guoli Electronic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,266  in Kunshan Guoli Electronic on December 2, 2024 and sell it today you would earn a total of  628.00  from holding Kunshan Guoli Electronic or generate 14.72% return on investment over 90 days.

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

Semiconductor Manufacturing El  vs.  Kunshan Guoli Electronic

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 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.

Kunshan Guoli Electronic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kunshan Guoli Electronic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kunshan Guoli sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Semiconductor Manufacturing and Kunshan Guoli

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

The idea behind Semiconductor Manufacturing Electronics and Kunshan Guoli Electronic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.