Correlation Between Veeco Instruments and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both Veeco Instruments 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 Veeco Instruments and GCT Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veeco Instruments and GCT Semiconductor Holding, you can compare the effects of market volatilities on Veeco Instruments 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 Veeco Instruments with a short position of GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeco Instruments and GCT Semiconductor.
Diversification Opportunities for Veeco Instruments and GCT Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Veeco and GCT is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments i.e., Veeco Instruments and GCT Semiconductor go up and down completely randomly.
Pair Corralation between Veeco Instruments and GCT Semiconductor
Given the investment horizon of 90 days Veeco Instruments is expected to generate 23.91 times less return on investment than GCT Semiconductor. But when comparing it to its historical volatility, Veeco Instruments is 15.94 times less risky than GCT Semiconductor. It trades about 0.02 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,049 in GCT Semiconductor Holding on November 19, 2024 and sell it today you would lose (834.00) from holding GCT Semiconductor Holding or give up 79.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 45.97% |
| Values | Daily Returns |
Veeco Instruments vs. GCT Semiconductor Holding
Performance |
| Timeline |
| Veeco Instruments |
| GCT Semiconductor Holding |
Veeco Instruments and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veeco Instruments and GCT Semiconductor
The main advantage of trading using opposite Veeco Instruments and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments 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.| Veeco Instruments vs. NVE Corporation | Veeco Instruments vs. Photronics | Veeco Instruments vs. Kulicke and Soffa | Veeco Instruments vs. Alvarium Tiedemann Holdings |
| GCT Semiconductor vs. Lery Seafood Group | GCT Semiconductor vs. McGrath RentCorp | GCT Semiconductor vs. Triton International Limited | GCT Semiconductor vs. Multi Ways 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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