Correlation Between Duluth Holdings and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and GCT Semiconductor 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 Duluth Holdings and GCT Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and GCT Semiconductor Holding, you can compare the effects of market volatilities on Duluth Holdings and GCT Semiconductor 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 Duluth Holdings with a short position of GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and GCT Semiconductor.
Diversification Opportunities for Duluth Holdings and GCT Semiconductor
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Duluth and GCT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and GCT Semiconductor go up and down completely randomly.
Pair Corralation between Duluth Holdings and GCT Semiconductor
Given the investment horizon of 90 days Duluth Holdings is expected to generate 0.61 times more return on investment than GCT Semiconductor. However, Duluth Holdings is 1.64 times less risky than GCT Semiconductor. It trades about 0.11 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about 0.03 per unit of risk. If you would invest 361.00 in Duluth Holdings on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Duluth Holdings or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. GCT Semiconductor Holding
Performance |
| Timeline |
| Duluth Holdings |
| GCT Semiconductor Holding |
Duluth Holdings and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and GCT Semiconductor
The main advantage of trading using opposite Duluth Holdings and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| Duluth Holdings vs. Capri Holdings | Duluth Holdings vs. Movado Group | Duluth Holdings vs. Tapestry | Duluth Holdings vs. Brilliant Earth Group |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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