Correlation Between GEAR4MUSIC (HLDGS) and GigaMedia
Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS) and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEAR4MUSIC LS 10 and GigaMedia, you can compare the effects of market volatilities on GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC (HLDGS) with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC (HLDGS) and GigaMedia.
Diversification Opportunities for GEAR4MUSIC (HLDGS) and GigaMedia
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEAR4MUSIC and GigaMedia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and GEAR4MUSIC (HLDGS) 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC (HLDGS) i.e., GEAR4MUSIC (HLDGS) and GigaMedia go up and down completely randomly.
Pair Corralation between GEAR4MUSIC (HLDGS) and GigaMedia
Assuming the 90 days horizon GEAR4MUSIC LS 10 is expected to under-perform the GigaMedia. But the stock apears to be less risky and, when comparing its historical volatility, GEAR4MUSIC LS 10 is 1.96 times less risky than GigaMedia. The stock trades about -0.39 of its potential returns per unit of risk. The GigaMedia is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 134.00 in GigaMedia on October 20, 2024 and sell it today you would earn a total of 14.00 from holding GigaMedia or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEAR4MUSIC LS 10 vs. GigaMedia
Performance |
| Timeline |
| GEAR4MUSIC (HLDGS) |
| GigaMedia |
GEAR4MUSIC (HLDGS) and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEAR4MUSIC (HLDGS) and GigaMedia
The main advantage of trading using opposite GEAR4MUSIC (HLDGS) and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC (HLDGS) 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.| GEAR4MUSIC (HLDGS) vs. VIVA WINE GROUP | GEAR4MUSIC (HLDGS) vs. Martin Marietta Materials | GEAR4MUSIC (HLDGS) vs. Mitsubishi Materials | GEAR4MUSIC (HLDGS) vs. GOODYEAR T RUBBER |
| GigaMedia vs. Spirent Communications plc | GigaMedia vs. Ribbon Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Chengdu PUTIAN Telecommunications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |