Correlation Between GSI Technology and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both GSI Technology and STMicroelectronics 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 STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and STMicroelectronics NV ADR, you can compare the effects of market volatilities on GSI Technology and STMicroelectronics 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 STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and STMicroelectronics.
Diversification Opportunities for GSI Technology and STMicroelectronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GSI and STMicroelectronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and STMicroelectronics NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics NV ADR 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 STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics NV ADR has no effect on the direction of GSI Technology i.e., GSI Technology and STMicroelectronics go up and down completely randomly.
Pair Corralation between GSI Technology and STMicroelectronics
Given the investment horizon of 90 days GSI Technology is expected to generate 1.96 times more return on investment than STMicroelectronics. However, GSI Technology is 1.96 times more volatile than STMicroelectronics NV ADR. It trades about -0.03 of its potential returns per unit of risk. STMicroelectronics NV ADR is currently generating about -0.1 per unit of risk. If you would invest 518.00 in GSI Technology on September 3, 2024 and sell it today you would lose (188.00) from holding GSI Technology or give up 36.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSI Technology vs. STMicroelectronics NV ADR
Performance |
| Timeline |
| GSI Technology |
| STMicroelectronics NV ADR |
GSI Technology and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and STMicroelectronics
The main advantage of trading using opposite GSI Technology and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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