Correlation Between Globalfoundries and PDF Solutions
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and PDF Solutions 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 Globalfoundries and PDF Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and PDF Solutions, you can compare the effects of market volatilities on Globalfoundries and PDF Solutions 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 Globalfoundries with a short position of PDF Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and PDF Solutions.
Diversification Opportunities for Globalfoundries and PDF Solutions
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globalfoundries and PDF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and PDF Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDF Solutions and Globalfoundries 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 Globalfoundries are associated (or correlated) with PDF Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDF Solutions has no effect on the direction of Globalfoundries i.e., Globalfoundries and PDF Solutions go up and down completely randomly.
Pair Corralation between Globalfoundries and PDF Solutions
Considering the 90-day investment horizon Globalfoundries is expected to generate 0.67 times more return on investment than PDF Solutions. However, Globalfoundries is 1.49 times less risky than PDF Solutions. It trades about -0.13 of its potential returns per unit of risk. PDF Solutions is currently generating about -0.18 per unit of risk. If you would invest 4,140 in Globalfoundries on December 4, 2024 and sell it today you would lose (452.00) from holding Globalfoundries or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Globalfoundries vs. PDF Solutions
Performance |
| Timeline |
| Globalfoundries |
| PDF Solutions |
Globalfoundries and PDF Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and PDF Solutions
The main advantage of trading using opposite Globalfoundries and PDF Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, PDF Solutions 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 PDF Solutions will offset losses from the drop in PDF Solutions' long position.| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
| PDF Solutions vs. Progress Software | PDF Solutions vs. PROS Holdings | PDF Solutions vs. Sapiens International | PDF Solutions vs. Meridianlink |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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