Correlation Between GSI Technology and Lattice Semiconductor

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

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

Diversification Opportunities for GSI Technology and Lattice Semiconductor

0.07

Correlation Coefficient

GSI Technology  Lattice Semiconductor

Significant diversification

The 3 months correlation between GSI and Lattice is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor and GSI 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 GSI Technology are associated (or correlated) with Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of GSI Technology i.e., GSI Technology and Lattice Semiconductor go up and down completely randomly.

Pair Corralation between GSI Technology and Lattice Semiconductor

Given the investment horizon of 90 days GSI Technology is expected to under-perform the Lattice Semiconductor. In addition to that, GSI Technology is 2.71 times more volatile than Lattice Semiconductor. It trades about -0.05 of its total potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.04 per unit of volatility. If you would invest  5,672  in Lattice Semiconductor on December 28, 2024 and sell it today you would earn a total of  243.00  from holding Lattice Semiconductor or generate 4.28% return on investment over 90 days.

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

GSI Technology  vs.  Lattice Semiconductor

GSI Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days GSI Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lattice Semiconductor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lattice Semiconductor are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Lattice Semiconductor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GSI Technology and Lattice Semiconductor

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

The idea behind GSI Technology and Lattice Semiconductor 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.