Correlation Between GSI Technology and Pixelworks
Can any of the company-specific risk be diversified away by investing in both GSI Technology and Pixelworks 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 Pixelworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and Pixelworks, you can compare the effects of market volatilities on GSI Technology and Pixelworks 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 Pixelworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and Pixelworks.
Diversification Opportunities for GSI Technology and Pixelworks
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GSI and Pixelworks is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Pixelworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pixelworks 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 Pixelworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pixelworks has no effect on the direction of GSI Technology i.e., GSI Technology and Pixelworks go up and down completely randomly.
Pair Corralation between GSI Technology and Pixelworks
Given the investment horizon of 90 days GSI Technology is expected to generate 14.42 times less return on investment than Pixelworks. But when comparing it to its historical volatility, GSI Technology is 1.36 times less risky than Pixelworks. It trades about 0.01 of its potential returns per unit of risk. Pixelworks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Pixelworks on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Pixelworks or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSI Technology vs. Pixelworks
Performance |
| Timeline |
| GSI Technology |
| Pixelworks |
GSI Technology and Pixelworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and Pixelworks
The main advantage of trading using opposite GSI Technology and Pixelworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, Pixelworks 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 Pixelworks will offset losses from the drop in Pixelworks' 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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