Correlation Between GRINM Semiconductor and Kangping Technology
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By analyzing existing cross correlation between GRINM Semiconductor Materials and Kangping Technology Co, you can compare the effects of market volatilities on GRINM Semiconductor and Kangping 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 GRINM Semiconductor with a short position of Kangping Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRINM Semiconductor and Kangping Technology.
Diversification Opportunities for GRINM Semiconductor and Kangping Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GRINM and Kangping is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GRINM Semiconductor Materials and Kangping Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangping Technology and GRINM 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 GRINM Semiconductor Materials are associated (or correlated) with Kangping Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangping Technology has no effect on the direction of GRINM Semiconductor i.e., GRINM Semiconductor and Kangping Technology go up and down completely randomly.
Pair Corralation between GRINM Semiconductor and Kangping Technology
Assuming the 90 days trading horizon GRINM Semiconductor Materials is expected to under-perform the Kangping Technology. But the stock apears to be less risky and, when comparing its historical volatility, GRINM Semiconductor Materials is 1.14 times less risky than Kangping Technology. The stock trades about -0.11 of its potential returns per unit of risk. The Kangping Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Kangping Technology Co on October 18, 2024 and sell it today you would lose (20.00) from holding Kangping Technology Co or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRINM Semiconductor Materials vs. Kangping Technology Co
Performance |
| Timeline |
| GRINM Semiconductor |
| Kangping Technology |
GRINM Semiconductor and Kangping Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRINM Semiconductor and Kangping Technology
The main advantage of trading using opposite GRINM Semiconductor and Kangping Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRINM Semiconductor position performs unexpectedly, Kangping 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 Kangping Technology will offset losses from the drop in Kangping Technology's long position.The idea behind GRINM Semiconductor Materials and Kangping Technology Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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