Correlation Between Gigabyte Technology and Leadtek Research
Can any of the company-specific risk be diversified away by investing in both Gigabyte Technology and Leadtek Research 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 Gigabyte Technology and Leadtek Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigabyte Technology Co and Leadtek Research, you can compare the effects of market volatilities on Gigabyte Technology and Leadtek Research 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 Gigabyte Technology with a short position of Leadtek Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigabyte Technology and Leadtek Research.
Diversification Opportunities for Gigabyte Technology and Leadtek Research
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gigabyte and Leadtek is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gigabyte Technology Co and Leadtek Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leadtek Research and Gigabyte Technology 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 Gigabyte Technology Co are associated (or correlated) with Leadtek Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leadtek Research has no effect on the direction of Gigabyte Technology i.e., Gigabyte Technology and Leadtek Research go up and down completely randomly.
Pair Corralation between Gigabyte Technology and Leadtek Research
Assuming the 90 days trading horizon Gigabyte Technology Co is expected to under-perform the Leadtek Research. But the stock apears to be less risky and, when comparing its historical volatility, Gigabyte Technology Co is 2.35 times less risky than Leadtek Research. The stock trades about -0.23 of its potential returns per unit of risk. The Leadtek Research is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,810 in Leadtek Research on September 12, 2024 and sell it today you would lose (190.00) from holding Leadtek Research or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigabyte Technology Co vs. Leadtek Research
Performance |
| Timeline |
| Gigabyte Technology |
| Leadtek Research |
Gigabyte Technology and Leadtek Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigabyte Technology and Leadtek Research
The main advantage of trading using opposite Gigabyte Technology and Leadtek Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigabyte Technology position performs unexpectedly, Leadtek Research 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 Leadtek Research will offset losses from the drop in Leadtek Research's long position.| Gigabyte Technology vs. AU Optronics | Gigabyte Technology vs. Innolux Corp | Gigabyte Technology vs. Ruentex Development Co | Gigabyte Technology vs. WiseChip Semiconductor |
| Leadtek Research vs. Elitegroup Computer Systems | Leadtek Research vs. Gigabyte Technology Co | Leadtek Research vs. Micro Star International Co | Leadtek Research vs. Biostar Microtech International |
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.
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