Correlation Between Tower One and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Tower One 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 Tower One and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower One Wireless and GigaMedia, you can compare the effects of market volatilities on Tower One 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 Tower One with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower One and GigaMedia.
Diversification Opportunities for Tower One and GigaMedia
Pay attention - limited upside
The 3 months correlation between Tower and GigaMedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tower One Wireless and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Tower One 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 Tower One Wireless 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 Tower One i.e., Tower One and GigaMedia go up and down completely randomly.
Pair Corralation between Tower One and GigaMedia
Assuming the 90 days trading horizon Tower One is expected to generate 11.68 times less return on investment than GigaMedia. In addition to that, Tower One is 1.11 times more volatile than GigaMedia. It trades about 0.0 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.03 per unit of volatility. If you would invest 122.00 in GigaMedia on November 3, 2024 and sell it today you would earn a total of 19.00 from holding GigaMedia or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower One Wireless vs. GigaMedia
Performance |
| Timeline |
| Tower One Wireless |
| GigaMedia |
Tower One and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower One and GigaMedia
The main advantage of trading using opposite Tower One and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower One 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.| Tower One vs. FIREWEED METALS P | Tower One vs. SIERRA METALS | Tower One vs. InPlay Oil Corp | Tower One vs. Playtech plc |
| GigaMedia vs. Autohome ADR | GigaMedia vs. Semiconductor Manufacturing International | GigaMedia vs. The Home Depot | GigaMedia vs. DFS Furniture PLC |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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