Correlation Between AWILCO DRILLING and GigaMedia
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING 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 AWILCO DRILLING and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and GigaMedia, you can compare the effects of market volatilities on AWILCO DRILLING 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 AWILCO DRILLING with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and GigaMedia.
Diversification Opportunities for AWILCO DRILLING and GigaMedia
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AWILCO and GigaMedia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and AWILCO DRILLING 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 AWILCO DRILLING PLC 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 AWILCO DRILLING i.e., AWILCO DRILLING and GigaMedia go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and GigaMedia
Assuming the 90 days trading horizon AWILCO DRILLING PLC is expected to generate 11.7 times more return on investment than GigaMedia. However, AWILCO DRILLING is 11.7 times more volatile than GigaMedia. It trades about 0.06 of its potential returns per unit of risk. GigaMedia is currently generating about 0.02 per unit of risk. If you would invest 56.00 in AWILCO DRILLING PLC on September 12, 2024 and sell it today you would earn a total of 128.00 from holding AWILCO DRILLING PLC or generate 228.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. GigaMedia
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| GigaMedia |
AWILCO DRILLING and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and GigaMedia
The main advantage of trading using opposite AWILCO DRILLING and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING 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.| AWILCO DRILLING vs. YOOMA WELLNESS INC | AWILCO DRILLING vs. Universal Display | AWILCO DRILLING vs. SHIP HEALTHCARE HLDGINC | AWILCO DRILLING vs. DiamondRock Hospitality |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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