Correlation Between MEDICAL FACILITIES and GigaMedia
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES 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 MEDICAL FACILITIES and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and GigaMedia, you can compare the effects of market volatilities on MEDICAL FACILITIES 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 MEDICAL FACILITIES with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and GigaMedia.
Diversification Opportunities for MEDICAL FACILITIES and GigaMedia
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEDICAL and GigaMedia is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES i.e., MEDICAL FACILITIES and GigaMedia go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and GigaMedia
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 2.05 times more return on investment than GigaMedia. However, MEDICAL FACILITIES is 2.05 times more volatile than GigaMedia. It trades about 0.08 of its potential returns per unit of risk. GigaMedia is currently generating about 0.03 per unit of risk. If you would invest 519.00 in MEDICAL FACILITIES NEW on September 12, 2024 and sell it today you would earn a total of 501.00 from holding MEDICAL FACILITIES NEW or generate 96.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. GigaMedia
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| GigaMedia |
MEDICAL FACILITIES and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and GigaMedia
The main advantage of trading using opposite MEDICAL FACILITIES and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES 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.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Universal Health Services | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. SIVERS SEMICONDUCTORS AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |