Correlation Between GSI Technology and Valens
Can any of the company-specific risk be diversified away by investing in both GSI Technology and Valens 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 Valens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSI Technology and Valens, you can compare the effects of market volatilities on GSI Technology and Valens 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 Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSI Technology and Valens.
Diversification Opportunities for GSI Technology and Valens
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GSI and Valens is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of GSI Technology i.e., GSI Technology and Valens go up and down completely randomly.
Pair Corralation between GSI Technology and Valens
Given the investment horizon of 90 days GSI Technology is expected to generate 1.43 times less return on investment than Valens. In addition to that, GSI Technology is 1.72 times more volatile than Valens. It trades about 0.22 of its total potential returns per unit of risk. Valens is currently generating about 0.53 per unit of volatility. If you would invest 180.00 in Valens on October 20, 2024 and sell it today you would earn a total of 155.00 from holding Valens or generate 86.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSI Technology vs. Valens
Performance |
| Timeline |
| GSI Technology |
| Valens |
GSI Technology and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSI Technology and Valens
The main advantage of trading using opposite GSI Technology and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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