Correlation Between GSI Technology and Monolithic Power
Can any of the company-specific risk be diversified away by investing in both GSI Technology and Monolithic Power 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 Monolithic Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and Monolithic Power Systems, you can compare the effects of market volatilities on GSI Technology and Monolithic Power 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 Monolithic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and Monolithic Power.
Diversification Opportunities for GSI Technology and Monolithic Power
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GSI and Monolithic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Monolithic Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monolithic Power Systems 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 Monolithic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monolithic Power Systems has no effect on the direction of GSI Technology i.e., GSI Technology and Monolithic Power go up and down completely randomly.
Pair Corralation between GSI Technology and Monolithic Power
Given the investment horizon of 90 days GSI Technology is expected to generate 1.74 times more return on investment than Monolithic Power. However, GSI Technology is 1.74 times more volatile than Monolithic Power Systems. It trades about 0.01 of its potential returns per unit of risk. Monolithic Power Systems is currently generating about -0.01 per unit of risk. If you would invest 416.00 in GSI Technology on August 27, 2024 and sell it today you would lose (97.00) from holding GSI Technology or give up 23.32% 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. Monolithic Power Systems
Performance |
| Timeline |
| GSI Technology |
| Monolithic Power Systems |
GSI Technology and Monolithic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and Monolithic Power
The main advantage of trading using opposite GSI Technology and Monolithic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, Monolithic Power 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 Monolithic Power will offset losses from the drop in Monolithic Power's long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
| Monolithic Power vs. Texas Instruments Incorporated | Monolithic Power vs. Microchip Technology | Monolithic Power vs. NXP Semiconductors NV | Monolithic Power vs. ON Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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