Correlation Between Giantec Semiconductor and Zhongrun Resources
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By analyzing existing cross correlation between Giantec Semiconductor Corp and Zhongrun Resources Investment, you can compare the effects of market volatilities on Giantec Semiconductor and Zhongrun Resources 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 Giantec Semiconductor with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giantec Semiconductor and Zhongrun Resources.
Diversification Opportunities for Giantec Semiconductor and Zhongrun Resources
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Giantec and Zhongrun is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Giantec 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 Giantec Semiconductor Corp are associated (or correlated) with Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Giantec Semiconductor and Zhongrun Resources
Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to generate 1.42 times more return on investment than Zhongrun Resources. However, Giantec Semiconductor is 1.42 times more volatile than Zhongrun Resources Investment. It trades about 0.2 of its potential returns per unit of risk. Zhongrun Resources Investment is currently generating about 0.05 per unit of risk. If you would invest 6,275 in Giantec Semiconductor Corp on October 29, 2024 and sell it today you would earn a total of 1,191 from holding Giantec Semiconductor Corp or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giantec Semiconductor Corp vs. Zhongrun Resources Investment
Performance |
| Timeline |
| Giantec Semiconductor |
| Zhongrun Resources |
Giantec Semiconductor and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giantec Semiconductor and Zhongrun Resources
The main advantage of trading using opposite Giantec Semiconductor and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giantec Semiconductor position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.The idea behind Giantec Semiconductor Corp and Zhongrun Resources Investment 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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