Correlation Between SolarEdge Technologies and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both SolarEdge Technologies and GCT Semiconductor 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 SolarEdge Technologies and GCT Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarEdge Technologies and GCT Semiconductor Holding, you can compare the effects of market volatilities on SolarEdge Technologies and GCT Semiconductor 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 SolarEdge Technologies with a short position of GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarEdge Technologies and GCT Semiconductor.
Diversification Opportunities for SolarEdge Technologies and GCT Semiconductor
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SolarEdge and GCT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding and SolarEdge Technologies 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 SolarEdge Technologies are associated (or correlated) with GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of SolarEdge Technologies i.e., SolarEdge Technologies and GCT Semiconductor go up and down completely randomly.
Pair Corralation between SolarEdge Technologies and GCT Semiconductor
Given the investment horizon of 90 days SolarEdge Technologies is expected to under-perform the GCT Semiconductor. In addition to that, SolarEdge Technologies is 1.73 times more volatile than GCT Semiconductor Holding. It trades about -0.02 of its total potential returns per unit of risk. GCT Semiconductor Holding is currently generating about 0.03 per unit of volatility. If you would invest 253.00 in GCT Semiconductor Holding on September 2, 2024 and sell it today you would earn a total of 2.00 from holding GCT Semiconductor Holding or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarEdge Technologies vs. GCT Semiconductor Holding
Performance |
| Timeline |
| SolarEdge Technologies |
| GCT Semiconductor Holding |
SolarEdge Technologies and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarEdge Technologies and GCT Semiconductor
The main advantage of trading using opposite SolarEdge Technologies and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. Enphase Energy |
| GCT Semiconductor vs. Burlington Stores | GCT Semiconductor vs. Boot Barn Holdings | GCT Semiconductor vs. Citi Trends | GCT Semiconductor vs. Duluth Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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