Correlation Between Cass Information and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and GigaMedia, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and GigaMedia.
Diversification Opportunities for Cass Information and GigaMedia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cass and GigaMedia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and GigaMedia go up and down completely randomly.
Pair Corralation between Cass Information and GigaMedia
Assuming the 90 days horizon Cass Information is expected to generate 1.18 times less return on investment than GigaMedia. In addition to that, Cass Information is 1.33 times more volatile than GigaMedia. It trades about 0.02 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.03 per unit of volatility. If you would invest 123.00 in GigaMedia on September 12, 2024 and sell it today you would earn a total of 10.00 from holding GigaMedia or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. GigaMedia
Performance |
| Timeline |
| Cass Information Systems |
| GigaMedia |
Cass Information and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and GigaMedia
The main advantage of trading using opposite Cass Information and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Tradegate AG Wertpapierhandelsbank | Cass Information vs. Guidewire Software | Cass Information vs. PT Bank Maybank | Cass Information vs. REVO INSURANCE SPA |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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