Correlation Between HYDROFARM HLD and GigaMedia
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD 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 HYDROFARM HLD and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and GigaMedia, you can compare the effects of market volatilities on HYDROFARM HLD 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 HYDROFARM HLD with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and GigaMedia.
Diversification Opportunities for HYDROFARM HLD and GigaMedia
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HYDROFARM and GigaMedia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and HYDROFARM HLD 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 HYDROFARM HLD GRP 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 HYDROFARM HLD i.e., HYDROFARM HLD and GigaMedia go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and GigaMedia
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 3.83 times more return on investment than GigaMedia. However, HYDROFARM HLD is 3.83 times more volatile than GigaMedia. It trades about 0.17 of its potential returns per unit of risk. GigaMedia is currently generating about 0.2 per unit of risk. If you would invest 62.00 in HYDROFARM HLD GRP on August 31, 2024 and sell it today you would earn a total of 14.00 from holding HYDROFARM HLD GRP or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. GigaMedia
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| GigaMedia |
HYDROFARM HLD and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and GigaMedia
The main advantage of trading using opposite HYDROFARM HLD and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD 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.| HYDROFARM HLD vs. Sunstone Hotel Investors | HYDROFARM HLD vs. Wyndham Hotels Resorts | HYDROFARM HLD vs. Playa Hotels Resorts | HYDROFARM HLD vs. DALATA HOTEL |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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