Correlation Between Globalfoundries and Peraso

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

By analyzing existing cross correlation between Globalfoundries and Peraso Inc, you can compare the effects of market volatilities on Globalfoundries and Peraso 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 Globalfoundries with a short position of Peraso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and Peraso.

Diversification Opportunities for Globalfoundries and Peraso

-0.72

Correlation Coefficient

Globalfoundries  Peraso

Pay attention - limited upside

The 3 months correlation between Globalfoundries and Peraso is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and Peraso Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peraso Inc and Globalfoundries 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 Globalfoundries are associated (or correlated) with Peraso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peraso Inc has no effect on the direction of Globalfoundries i.e., Globalfoundries and Peraso go up and down completely randomly.

Pair Corralation between Globalfoundries and Peraso

Considering the 90-day investment horizon Globalfoundries is expected to under-perform the Peraso. But the stock apears to be less risky and, when comparing its historical volatility, Globalfoundries is 5.77 times less risky than Peraso. The stock trades about -0.16 of its potential returns per unit of risk. The Peraso Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Peraso Inc on October 13, 2024 and sell it today you would earn a total of  30.00  from holding Peraso Inc or generate 34.88% return on investment over 90 days.

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

Globalfoundries  vs.  Peraso Inc

Globalfoundries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globalfoundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Globalfoundries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Peraso Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peraso Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Globalfoundries and Peraso

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

The idea behind Globalfoundries and Peraso Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.