Correlation Between Abits and SemiLEDS

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

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

Diversification Opportunities for Abits and SemiLEDS

0.2

Correlation Coefficient

Abits  SemiLEDS

Modest diversification

The 3 months correlation between Abits and SemiLEDS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Abits Group and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS and Abits 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 Abits Group are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Abits i.e., Abits and SemiLEDS go up and down completely randomly.

Pair Corralation between Abits and SemiLEDS

Given the investment horizon of 90 days Abits Group is expected to generate 7.14 times more return on investment than SemiLEDS. However, Abits is 7.14 times more volatile than SemiLEDS. It trades about 0.11 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.03 per unit of risk. If you would invest  258.00  in Abits Group on April 30, 2025 and sell it today you would earn a total of  214.00  from holding Abits Group or generate 82.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Abits Group  vs.  SemiLEDS

Abits Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abits Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Abits unveiled solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Abits and SemiLEDS

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

The idea behind Abits Group and SemiLEDS 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.