Correlation Between GCT Semiconductor and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both GCT Semiconductor and Silicon Motion 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 GCT Semiconductor and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCT Semiconductor Holding and Silicon Motion Technology, you can compare the effects of market volatilities on GCT Semiconductor and Silicon Motion 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 GCT Semiconductor with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCT Semiconductor and Silicon Motion.
Diversification Opportunities for GCT Semiconductor and Silicon Motion
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GCT and Silicon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GCT Semiconductor Holding and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and GCT 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 GCT Semiconductor Holding are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of GCT Semiconductor i.e., GCT Semiconductor and Silicon Motion go up and down completely randomly.
Pair Corralation between GCT Semiconductor and Silicon Motion
Given the investment horizon of 90 days GCT Semiconductor is expected to generate 1.51 times less return on investment than Silicon Motion. In addition to that, GCT Semiconductor is 1.89 times more volatile than Silicon Motion Technology. It trades about 0.03 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.08 per unit of volatility. If you would invest 5,179 in Silicon Motion Technology on September 4, 2024 and sell it today you would earn a total of 216.00 from holding Silicon Motion Technology or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GCT Semiconductor Holding vs. Silicon Motion Technology
Performance |
| Timeline |
| GCT Semiconductor Holding |
| Silicon Motion Technology |
GCT Semiconductor and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCT Semiconductor and Silicon Motion
The main advantage of trading using opposite GCT Semiconductor and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCT Semiconductor position performs unexpectedly, Silicon Motion 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 Silicon Motion will offset losses from the drop in Silicon Motion's long position.| GCT Semiconductor vs. Taiwan Semiconductor Manufacturing | GCT Semiconductor vs. MACOM Technology Solutions | GCT Semiconductor vs. Everspin Technologies | GCT Semiconductor vs. National Vision Holdings |
| Silicon Motion vs. ASE Industrial Holding | Silicon Motion vs. United Microelectronics | Silicon Motion vs. ChipMOS Technologies | Silicon Motion vs. SemiLEDS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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