Correlation Between CEOTRONICS and GigaMedia
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS 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 CEOTRONICS and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and GigaMedia, you can compare the effects of market volatilities on CEOTRONICS 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 CEOTRONICS with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS and GigaMedia.
Diversification Opportunities for CEOTRONICS and GigaMedia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEOTRONICS and GigaMedia is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS i.e., CEOTRONICS and GigaMedia go up and down completely randomly.
Pair Corralation between CEOTRONICS and GigaMedia
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 2.1 times more return on investment than GigaMedia. However, CEOTRONICS is 2.1 times more volatile than GigaMedia. It trades about 0.09 of its potential returns per unit of risk. GigaMedia is currently generating about 0.02 per unit of risk. If you would invest 310.00 in CEOTRONICS on September 12, 2024 and sell it today you would earn a total of 350.00 from holding CEOTRONICS or generate 112.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. GigaMedia
Performance |
| Timeline |
| CEOTRONICS |
| GigaMedia |
CEOTRONICS and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS and GigaMedia
The main advantage of trading using opposite CEOTRONICS and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS 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.| CEOTRONICS vs. Nok Airlines PCL | CEOTRONICS vs. Sekisui Chemical Co | CEOTRONICS vs. URBAN OUTFITTERS | CEOTRONICS vs. Nissan Chemical Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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