Correlation Between GigaMedia and Ping An
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Ping An 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 GigaMedia and Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Ping An Healthcare, you can compare the effects of market volatilities on GigaMedia and Ping An 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 GigaMedia with a short position of Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Ping An.
Diversification Opportunities for GigaMedia and Ping An
Very good diversification
The 3 months correlation between GigaMedia and Ping is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare and GigaMedia 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 GigaMedia are associated (or correlated) with Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Healthcare has no effect on the direction of GigaMedia i.e., GigaMedia and Ping An go up and down completely randomly.
Pair Corralation between GigaMedia and Ping An
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.31 times more return on investment than Ping An. However, GigaMedia is 1.31 times more volatile than Ping An Healthcare. It trades about 0.09 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.26 per unit of risk. If you would invest 140.00 in GigaMedia on October 25, 2024 and sell it today you would earn a total of 6.00 from holding GigaMedia or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Ping An Healthcare
Performance |
| Timeline |
| GigaMedia |
| Ping An Healthcare |
GigaMedia and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Ping An
The main advantage of trading using opposite GigaMedia and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| GigaMedia vs. MAGNUM MINING EXP | GigaMedia vs. Park Hotels Resorts | GigaMedia vs. Perseus Mining Limited | GigaMedia vs. Harmony Gold Mining |
| Ping An vs. Haverty Furniture Companies | Ping An vs. Taylor Morrison Home | Ping An vs. OFFICE DEPOT | Ping An vs. Aedas Homes SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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