Correlation Between GSI Technology and Meta Materials
Can any of the company-specific risk be diversified away by investing in both GSI Technology and Meta Materials 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 Meta Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and Meta Materials, you can compare the effects of market volatilities on GSI Technology and Meta Materials 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 Meta Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and Meta Materials.
Diversification Opportunities for GSI Technology and Meta Materials
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GSI and Meta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Meta Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Materials 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 Meta Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Materials has no effect on the direction of GSI Technology i.e., GSI Technology and Meta Materials go up and down completely randomly.
Pair Corralation between GSI Technology and Meta Materials
Given the investment horizon of 90 days GSI Technology is expected to under-perform the Meta Materials. But the stock apears to be less risky and, when comparing its historical volatility, GSI Technology is 16.52 times less risky than Meta Materials. The stock trades about -0.08 of its potential returns per unit of risk. The Meta Materials is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Meta Materials on September 13, 2024 and sell it today you would lose (6.09) from holding Meta Materials or give up 99.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
GSI Technology vs. Meta Materials
Performance |
| Timeline |
| GSI Technology |
| Meta Materials |
GSI Technology and Meta Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and Meta Materials
The main advantage of trading using opposite GSI Technology and Meta Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, Meta Materials 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 Meta Materials will offset losses from the drop in Meta Materials' long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
| Meta Materials vs. Cps Technologies | Meta Materials vs. Kopin | Meta Materials vs. Wallbox NV | Meta Materials vs. Corning Incorporated |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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