Correlation Between CVS Group and GigaMedia
Can any of the company-specific risk be diversified away by investing in both CVS Group 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 CVS Group and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Group plc and GigaMedia, you can compare the effects of market volatilities on CVS Group 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 CVS Group with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Group and GigaMedia.
Diversification Opportunities for CVS Group and GigaMedia
Pay attention - limited upside
The 3 months correlation between CVS and GigaMedia is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding CVS Group plc and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and CVS Group 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 CVS Group 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 CVS Group i.e., CVS Group and GigaMedia go up and down completely randomly.
Pair Corralation between CVS Group and GigaMedia
Assuming the 90 days horizon CVS Group plc is expected to under-perform the GigaMedia. In addition to that, CVS Group is 1.52 times more volatile than GigaMedia. It trades about -0.1 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.13 per unit of volatility. If you would invest 115.00 in GigaMedia on September 12, 2024 and sell it today you would earn a total of 18.00 from holding GigaMedia or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Group plc vs. GigaMedia
Performance |
| Timeline |
| CVS Group plc |
| GigaMedia |
CVS Group and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Group and GigaMedia
The main advantage of trading using opposite CVS Group and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Group 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.| CVS Group vs. MGIC INVESTMENT | CVS Group vs. PLAYSTUDIOS A DL 0001 | CVS Group vs. Flutter Entertainment PLC | CVS Group vs. CNVISION MEDIA |
| GigaMedia vs. Titan Machinery | GigaMedia vs. AUST AGRICULTURAL | GigaMedia vs. North American Construction | GigaMedia vs. ALEFARM BREWING DK 05 |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |