Correlation Between GSI Technology and ChipMOS Technologies
Can any of the company-specific risk be diversified away by investing in both GSI Technology and ChipMOS Technologies 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 ChipMOS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and ChipMOS Technologies, you can compare the effects of market volatilities on GSI Technology and ChipMOS Technologies 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 ChipMOS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and ChipMOS Technologies.
Diversification Opportunities for GSI Technology and ChipMOS Technologies
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GSI and ChipMOS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies 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 ChipMOS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipMOS Technologies has no effect on the direction of GSI Technology i.e., GSI Technology and ChipMOS Technologies go up and down completely randomly.
Pair Corralation between GSI Technology and ChipMOS Technologies
Given the investment horizon of 90 days GSI Technology is expected to generate 3.79 times more return on investment than ChipMOS Technologies. However, GSI Technology is 3.79 times more volatile than ChipMOS Technologies. It trades about 0.0 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about -0.01 per unit of risk. If you would invest 602.00 in GSI Technology on August 28, 2024 and sell it today you would lose (292.00) from holding GSI Technology or give up 48.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSI Technology vs. ChipMOS Technologies
Performance |
| Timeline |
| GSI Technology |
| ChipMOS Technologies |
GSI Technology and ChipMOS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and ChipMOS Technologies
The main advantage of trading using opposite GSI Technology and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, ChipMOS Technologies 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 ChipMOS Technologies will offset losses from the drop in ChipMOS Technologies' long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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