Correlation Between GSI Technology and Analog Devices
Can any of the company-specific risk be diversified away by investing in both GSI Technology and Analog Devices 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 GSI Technology and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and Analog Devices, you can compare the effects of market volatilities on GSI Technology and Analog Devices 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 GSI Technology with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and Analog Devices.
Diversification Opportunities for GSI Technology and Analog Devices
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GSI and Analog is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and GSI Technology 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 GSI Technology are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of GSI Technology i.e., GSI Technology and Analog Devices go up and down completely randomly.
Pair Corralation between GSI Technology and Analog Devices
Given the investment horizon of 90 days GSI Technology is expected to generate 2.13 times more return on investment than Analog Devices. However, GSI Technology is 2.13 times more volatile than Analog Devices. It trades about -0.07 of its potential returns per unit of risk. Analog Devices is currently generating about -0.16 per unit of risk. If you would invest 348.00 in GSI Technology on August 30, 2024 and sell it today you would lose (30.00) from holding GSI Technology or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSI Technology vs. Analog Devices
Performance |
| Timeline |
| GSI Technology |
| Analog Devices |
GSI Technology and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and Analog Devices
The main advantage of trading using opposite GSI Technology and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
| Analog Devices vs. First Solar | Analog Devices vs. Sunrun Inc | Analog Devices vs. Canadian Solar | Analog Devices vs. SolarEdge Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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