Correlation Between GSI Technology and Rubicon Technology

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

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

Diversification Opportunities for GSI Technology and Rubicon Technology

0.3

Correlation Coefficient

GSI Technology  Rubicon Technology

Weak diversification

The 3 months correlation between GSI and Rubicon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Rubicon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technology 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 Rubicon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technology has no effect on the direction of GSI Technology i.e., GSI Technology and Rubicon Technology go up and down completely randomly.

Pair Corralation between GSI Technology and Rubicon Technology

If you would invest  157.00  in Rubicon Technology on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Rubicon Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	2.44%
Values	Daily Returns

GSI Technology  vs.  Rubicon Technology

GSI Technology

Risk-Adjusted Performance

0 of 100

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 comparatively stable forward indicators, GSI Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Rubicon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Rubicon Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GSI Technology and Rubicon Technology

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

The idea behind GSI Technology and Rubicon Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.