Correlation Between ROPEOK Technology and Giantec Semiconductor

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

By analyzing existing cross correlation between ROPEOK Technology Group and Giantec Semiconductor Corp, you can compare the effects of market volatilities on ROPEOK Technology and Giantec Semiconductor 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 ROPEOK Technology with a short position of Giantec Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROPEOK Technology and Giantec Semiconductor.

Diversification Opportunities for ROPEOK Technology and Giantec Semiconductor

0.14

Correlation Coefficient

ROPEOK Technology  Giantec Semiconductor

Average diversification

The 3 months correlation between ROPEOK and Giantec is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ROPEOK Technology Group and Giantec Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giantec Semiconductor and ROPEOK Technology 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 ROPEOK Technology Group are associated (or correlated) with Giantec Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giantec Semiconductor has no effect on the direction of ROPEOK Technology i.e., ROPEOK Technology and Giantec Semiconductor go up and down completely randomly.

Pair Corralation between ROPEOK Technology and Giantec Semiconductor

Assuming the 90 days trading horizon ROPEOK Technology Group is expected to under-perform the Giantec Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, ROPEOK Technology Group is 1.3 times less risky than Giantec Semiconductor. The stock trades about -0.23 of its potential returns per unit of risk. The Giantec Semiconductor Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,788  in Giantec Semiconductor Corp on October 11, 2024 and sell it today you would earn a total of  866.00  from holding Giantec Semiconductor Corp or generate 14.96% return on investment over 90 days.

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

ROPEOK Technology Group  vs.  Giantec Semiconductor Corp

ROPEOK Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ROPEOK Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ROPEOK Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Giantec Semiconductor

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with ROPEOK Technology and Giantec Semiconductor

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

The idea behind ROPEOK Technology Group and Giantec Semiconductor Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.