Correlation Between ABOV Semiconductor and GS Engineering
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor and GS Engineering 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 ABOV Semiconductor and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and GS Engineering Construction, you can compare the effects of market volatilities on ABOV Semiconductor and GS Engineering 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 ABOV Semiconductor with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and GS Engineering.
Diversification Opportunities for ABOV Semiconductor and GS Engineering
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABOV and 006360 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and ABOV 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 ABOV Semiconductor Co are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of ABOV Semiconductor i.e., ABOV Semiconductor and GS Engineering go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and GS Engineering
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to under-perform the GS Engineering. In addition to that, ABOV Semiconductor is 1.4 times more volatile than GS Engineering Construction. It trades about -0.03 of its total potential returns per unit of risk. GS Engineering Construction is currently generating about -0.01 per unit of volatility. If you would invest 1,827,000 in GS Engineering Construction on October 26, 2024 and sell it today you would lose (69,000) from holding GS Engineering Construction or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. GS Engineering Construction
Performance |
| Timeline |
| ABOV Semiconductor |
| GS Engineering Const |
ABOV Semiconductor and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and GS Engineering
The main advantage of trading using opposite ABOV Semiconductor and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| ABOV Semiconductor vs. Samsung Electronics Co | ABOV Semiconductor vs. Samsung Electronics Co | ABOV Semiconductor vs. SK Hynix | ABOV Semiconductor vs. HMM Co |
| GS Engineering vs. Hanmi Semiconductor Co | GS Engineering vs. ABOV Semiconductor Co | GS Engineering vs. PI Advanced Materials | GS Engineering vs. Automobile Pc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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