Correlation Between Suntory Beverage and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and GigaMedia, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and GigaMedia.
Diversification Opportunities for Suntory Beverage and GigaMedia
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntory and GigaMedia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and GigaMedia go up and down completely randomly.
Pair Corralation between Suntory Beverage and GigaMedia
Assuming the 90 days horizon Suntory Beverage Food is expected to under-perform the GigaMedia. But the stock apears to be less risky and, when comparing its historical volatility, Suntory Beverage Food is 2.12 times less risky than GigaMedia. The stock trades about -0.15 of its potential returns per unit of risk. The GigaMedia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 140.00 in GigaMedia on October 26, 2024 and sell it today you would earn a total of 6.00 from holding GigaMedia or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. GigaMedia
Performance |
| Timeline |
| Suntory Beverage Food |
| GigaMedia |
Suntory Beverage and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and GigaMedia
The main advantage of trading using opposite Suntory Beverage and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Heineken NV | Suntory Beverage vs. HEINEKEN SP ADR | Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Carlsberg AS |
| GigaMedia vs. MOLSON RS BEVERAGE | GigaMedia vs. Suntory Beverage Food | GigaMedia vs. USWE SPORTS AB | GigaMedia vs. SAN MIGUEL BREWERY |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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