Correlation Between Giantec Semiconductor and Longjian Road
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By analyzing existing cross correlation between Giantec Semiconductor Corp and Longjian Road Bridge, you can compare the effects of market volatilities on Giantec Semiconductor and Longjian Road 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 Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giantec Semiconductor and Longjian Road.
Diversification Opportunities for Giantec Semiconductor and Longjian Road
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Giantec and Longjian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Giantec Semiconductor Corp and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge 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 Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of Giantec Semiconductor i.e., Giantec Semiconductor and Longjian Road go up and down completely randomly.
Pair Corralation between Giantec Semiconductor and Longjian Road
Assuming the 90 days trading horizon Giantec Semiconductor Corp is expected to generate 1.21 times more return on investment than Longjian Road. However, Giantec Semiconductor is 1.21 times more volatile than Longjian Road Bridge. It trades about 0.13 of its potential returns per unit of risk. Longjian Road Bridge is currently generating about -0.03 per unit of risk. If you would invest 5,713 in Giantec Semiconductor Corp on October 30, 2024 and sell it today you would earn a total of 1,151 from holding Giantec Semiconductor Corp or generate 20.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giantec Semiconductor Corp vs. Longjian Road Bridge
Performance |
| Timeline |
| Giantec Semiconductor |
| Longjian Road Bridge |
Giantec Semiconductor and Longjian Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giantec Semiconductor and Longjian Road
The main advantage of trading using opposite Giantec Semiconductor and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giantec Semiconductor position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.The idea behind Giantec Semiconductor Corp and Longjian Road Bridge 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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