Correlation Between REMEDY ENTERTAINMENT and GigaMedia
Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and GigaMedia, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and GigaMedia.
Diversification Opportunities for REMEDY ENTERTAINMENT and GigaMedia
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between REMEDY and GigaMedia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and GigaMedia go up and down completely randomly.
Pair Corralation between REMEDY ENTERTAINMENT and GigaMedia
Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the GigaMedia. In addition to that, REMEDY ENTERTAINMENT is 1.71 times more volatile than GigaMedia. It trades about -0.02 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.02 per unit of volatility. If you would invest 125.00 in GigaMedia on November 28, 2024 and sell it today you would earn a total of 13.00 from holding GigaMedia or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REMEDY ENTERTAINMENT OYJ vs. GigaMedia
Performance |
| Timeline |
| REMEDY ENTERTAINMENT OYJ |
| GigaMedia |
REMEDY ENTERTAINMENT and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REMEDY ENTERTAINMENT and GigaMedia
The main advantage of trading using opposite REMEDY ENTERTAINMENT and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT 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.| REMEDY ENTERTAINMENT vs. Evolution Mining Limited | REMEDY ENTERTAINMENT vs. BAKED GAMES SA | REMEDY ENTERTAINMENT vs. Games Workshop Group | REMEDY ENTERTAINMENT vs. ADRIATIC METALS LS 013355 |
| GigaMedia vs. Prosiebensat 1 Media | GigaMedia vs. Southwest Airlines Co | GigaMedia vs. ANTA Sports Products | GigaMedia vs. EITZEN CHEMICALS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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