Correlation Between G III and GigaMedia
Can any of the company-specific risk be diversified away by investing in both G III 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 G III and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III Apparel Group and GigaMedia, you can compare the effects of market volatilities on G III 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 G III with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and GigaMedia.
Diversification Opportunities for G III and GigaMedia
Weak diversification
The 3 months correlation between GI4 and GigaMedia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and G III 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 G III Apparel Group 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 G III i.e., G III and GigaMedia go up and down completely randomly.
Pair Corralation between G III and GigaMedia
Assuming the 90 days trading horizon G III Apparel Group is expected to generate 1.67 times more return on investment than GigaMedia. However, G III is 1.67 times more volatile than GigaMedia. It trades about 0.1 of its potential returns per unit of risk. GigaMedia is currently generating about 0.11 per unit of risk. If you would invest 2,380 in G III Apparel Group on November 2, 2024 and sell it today you would earn a total of 780.00 from holding G III Apparel Group or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. GigaMedia
Performance |
| Timeline |
| G III Apparel |
| GigaMedia |
G III and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and GigaMedia
The main advantage of trading using opposite G III and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III 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.| G III vs. SILVER BULLET DATA | G III vs. Apollo Investment Corp | G III vs. Extra Space Storage | G III vs. TERADATA |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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