Correlation Between PT Global and GigaMedia

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PT Global and GigaMedia 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 PT Global and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and GigaMedia, you can compare the effects of market volatilities on PT Global and GigaMedia 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 PT Global with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and GigaMedia.

Diversification Opportunities for PT Global and GigaMedia

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between 06L and GigaMedia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and PT Global 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 PT Global Mediacom are associated (or correlated) with GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of PT Global i.e., PT Global and GigaMedia go up and down completely randomly.

Pair Corralation between PT Global and GigaMedia

If you would invest  122.00  in GigaMedia on August 28, 2024 and sell it today you would earn a total of  11.00  from holding GigaMedia or generate 9.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PT Global Mediacom  vs.  GigaMedia

 Performance 
       Timeline  
PT Global Mediacom 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GigaMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

PT Global and GigaMedia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Global and GigaMedia

The main advantage of trading using opposite PT Global and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.
The idea behind PT Global Mediacom and GigaMedia 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.
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments