Correlation Between Navitas Semiconductor and GSI Technology

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

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

Diversification Opportunities for Navitas Semiconductor and GSI Technology

0.46

Correlation Coefficient

Navitas Semiconductor  GSI Technology

Very weak diversification

The 3 months correlation between Navitas and GSI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Navitas Semiconductor Corp and GSI Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSI Technology and Navitas Semiconductor 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 Navitas Semiconductor Corp are associated (or correlated) with GSI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSI Technology has no effect on the direction of Navitas Semiconductor i.e., Navitas Semiconductor and GSI Technology go up and down completely randomly.

Pair Corralation between Navitas Semiconductor and GSI Technology

Given the investment horizon of 90 days Navitas Semiconductor Corp is expected to under-perform the GSI Technology. In addition to that, Navitas Semiconductor is 1.0 times more volatile than GSI Technology. It trades about -0.01 of its total potential returns per unit of risk. GSI Technology is currently generating about 0.02 per unit of volatility. If you would invest  277.00  in GSI Technology on December 20, 2024 and sell it today you would lose (10.00) from holding GSI Technology or give up 3.61% of portfolio value over 90 days.

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

Navitas Semiconductor Corp  vs.  GSI Technology

Navitas Semiconductor

Risk-Adjusted Performance

Weak

Over the last 90 days Navitas Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

GSI Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GSI Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, GSI Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Navitas Semiconductor and GSI Technology

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

The idea behind Navitas Semiconductor Corp and GSI 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.