Correlation Between Hudbay Minerals and GCT Semiconductor

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

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

Diversification Opportunities for Hudbay Minerals and GCT Semiconductor

-0.15

Correlation Coefficient

Hudbay Minerals  GCT Semiconductor

Good diversification

The 3 months correlation between Hudbay and GCT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals i.e., Hudbay Minerals and GCT Semiconductor go up and down completely randomly.

Pair Corralation between Hudbay Minerals and GCT Semiconductor

Considering the 90-day investment horizon Hudbay Minerals is expected to generate 1.0 times more return on investment than GCT Semiconductor. However, Hudbay Minerals is 1.0 times more volatile than GCT Semiconductor Holding. It trades about 0.17 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about -0.4 per unit of risk. If you would invest  853.00  in Hudbay Minerals on March 5, 2024 and sell it today you would earn a total of  123.00  from holding Hudbay Minerals or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hudbay Minerals  vs.  GCT Semiconductor Holding

Hudbay Minerals

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hudbay Minerals are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, Hudbay Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

GCT Semiconductor Holding

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCT Semiconductor Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, GCT Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hudbay Minerals and GCT Semiconductor

The main advantage of trading using opposite Hudbay Minerals and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudbay Minerals 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.

The idea behind Hudbay Minerals and GCT Semiconductor Holding 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.