Correlation Between Rubicon Technology and GSI Technology

Can any of the company-specific risk be diversified away by investing in both Rubicon Technology and GSI Technology 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 Rubicon Technology and GSI Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rubicon Technology and GSI Technology, you can compare the effects of market volatilities on Rubicon Technology and GSI Technology 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 Rubicon Technology with a short position of GSI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Technology and GSI Technology.

Diversification Opportunities for Rubicon Technology and GSI Technology

0.23

Correlation Coefficient

Rubicon Technology  GSI Technology

Modest diversification

The 3 months correlation between Rubicon and GSI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Technology and GSI Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSI Technology and Rubicon 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 Rubicon Technology are associated (or correlated) with GSI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSI Technology has no effect on the direction of Rubicon Technology i.e., Rubicon Technology and GSI Technology go up and down completely randomly.

Pair Corralation between Rubicon Technology and GSI Technology

If you would invest  288.00  in GSI Technology on September 21, 2024 and sell it today you would lose (15.00) from holding GSI Technology or give up 5.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Rubicon Technology  vs.  GSI Technology

Rubicon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Rubicon Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

GSI Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GSI Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, GSI Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rubicon Technology and GSI Technology

The main advantage of trading using opposite Rubicon Technology and GSI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Technology position performs unexpectedly, GSI Technology 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 GSI Technology will offset losses from the drop in GSI Technology's long position.

The idea behind Rubicon Technology and GSI Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.