Correlation Between Western Copper and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and GigaMedia, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and GigaMedia.
Diversification Opportunities for Western Copper and GigaMedia
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and GigaMedia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and GigaMedia go up and down completely randomly.
Pair Corralation between Western Copper and GigaMedia
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the GigaMedia. In addition to that, Western Copper is 1.97 times more volatile than GigaMedia. It trades about -0.02 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.04 per unit of volatility. If you would invest 108.00 in GigaMedia on August 31, 2024 and sell it today you would earn a total of 25.00 from holding GigaMedia or generate 23.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. GigaMedia
Performance |
| Timeline |
| Western Copper |
| GigaMedia |
Western Copper and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and GigaMedia
The main advantage of trading using opposite Western Copper and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.| Western Copper vs. MTI WIRELESS EDGE | Western Copper vs. Playa Hotels Resorts | Western Copper vs. Playtech plc | Western Copper vs. INTERSHOP Communications Aktiengesellschaft |
| GigaMedia vs. JJ SNACK FOODS | GigaMedia vs. MOLSON RS BEVERAGE | GigaMedia vs. Astral Foods Limited | GigaMedia vs. Zijin Mining Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |