Correlation Between Capital Counties and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Capital Counties 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 Capital Counties and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Counties Properties and GigaMedia, you can compare the effects of market volatilities on Capital Counties 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 Capital Counties with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Counties and GigaMedia.
Diversification Opportunities for Capital Counties and GigaMedia
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and GigaMedia is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Capital Counties Properties and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Capital Counties 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 Capital Counties Properties 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 Capital Counties i.e., Capital Counties and GigaMedia go up and down completely randomly.
Pair Corralation between Capital Counties and GigaMedia
Assuming the 90 days horizon Capital Counties Properties is expected to generate 1.44 times more return on investment than GigaMedia. However, Capital Counties is 1.44 times more volatile than GigaMedia. It trades about 0.03 of its potential returns per unit of risk. GigaMedia is currently generating about 0.01 per unit of risk. If you would invest 134.00 in Capital Counties Properties on September 2, 2024 and sell it today you would earn a total of 26.00 from holding Capital Counties Properties or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Counties Properties vs. GigaMedia
Performance |
| Timeline |
| Capital Counties Pro |
| GigaMedia |
Capital Counties and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Counties and GigaMedia
The main advantage of trading using opposite Capital Counties and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Counties 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.| Capital Counties vs. MOLSON RS BEVERAGE | Capital Counties vs. Caltagirone SpA | Capital Counties vs. BLUESCOPE STEEL | Capital Counties vs. Thai Beverage Public |
| GigaMedia vs. Boyd Gaming | GigaMedia vs. Charter Communications | GigaMedia vs. GAMESTOP | GigaMedia vs. FRACTAL GAMING 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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