Correlation Between GigaMedia and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both GigaMedia and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on GigaMedia and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and TOWNSQUARE MEDIA.
Diversification Opportunities for GigaMedia and TOWNSQUARE MEDIA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GigaMedia and TOWNSQUARE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of GigaMedia i.e., GigaMedia and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between GigaMedia and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon GigaMedia is expected to under-perform the TOWNSQUARE MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, GigaMedia is 2.2 times less risky than TOWNSQUARE MEDIA. The stock trades about -0.22 of its potential returns per unit of risk. The TOWNSQUARE MEDIA INC is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 855.00 in TOWNSQUARE MEDIA INC on November 27, 2024 and sell it today you would lose (25.00) from holding TOWNSQUARE MEDIA INC or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| GigaMedia |
| TOWNSQUARE MEDIA INC |
GigaMedia and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and TOWNSQUARE MEDIA
The main advantage of trading using opposite GigaMedia and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| GigaMedia vs. Renesas Electronics | GigaMedia vs. BIOPHARMA CREDIT DL | GigaMedia vs. Samsung Electronics Co | GigaMedia vs. BANK OCHINA H |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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