I certainly didn't expect anyone to make this kind of connection. The only giallo I saw was the Stendhal Syndrome (I think it counts, I could be wrong), but it could definitely work as psychological horror.
>Protagonist is a sexy, capable of both being brave and breaking down
>Villain is a sexual predator, that has proven to work in Haunting Ground
>Violence is crude, yet stylized
>The titular stendhal syndrome creates hallucinations and even breaks down reality when viewing art, almost demanding fantastic art direction
And RE/Silent hill PS1/PS2 era would definitely be doable.