Correlation Between Nano Labs and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Nano Labs and Globalfoundries 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 Nano Labs and Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Labs and Globalfoundries, you can compare the effects of market volatilities on Nano Labs and Globalfoundries 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 Nano Labs with a short position of Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Labs and Globalfoundries.
Diversification Opportunities for Nano Labs and Globalfoundries
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nano and Globalfoundries is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Nano Labs 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 Nano Labs are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Nano Labs i.e., Nano Labs and Globalfoundries go up and down completely randomly.
Pair Corralation between Nano Labs and Globalfoundries
Allowing for the 90-day total investment horizon Nano Labs is expected to under-perform the Globalfoundries. In addition to that, Nano Labs is 3.26 times more volatile than Globalfoundries. It trades about -0.11 of its total potential returns per unit of risk. Globalfoundries is currently generating about -0.19 per unit of volatility. If you would invest 4,162 in Globalfoundries on November 9, 2024 and sell it today you would lose (302.00) from holding Globalfoundries or give up 7.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nano Labs vs. Globalfoundries
Performance |
| Timeline |
| Nano Labs |
| Globalfoundries |
Nano Labs and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano Labs and Globalfoundries
The main advantage of trading using opposite Nano Labs and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Labs position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Nano Labs vs. SEALSQ Corp | Nano Labs vs. GSI Technology | Nano Labs vs. SemiLEDS | Nano Labs vs. ChipMOS Technologies |
| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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