Correlation Between GigaMedia and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both GigaMedia and ADRIATIC METALS 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 ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on GigaMedia and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and ADRIATIC METALS.
Diversification Opportunities for GigaMedia and ADRIATIC METALS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaMedia and ADRIATIC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of GigaMedia i.e., GigaMedia and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between GigaMedia and ADRIATIC METALS
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.72 times less return on investment than ADRIATIC METALS. But when comparing it to its historical volatility, GigaMedia is 2.23 times less risky than ADRIATIC METALS. It trades about 0.04 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 197.00 in ADRIATIC METALS LS 013355 on August 31, 2024 and sell it today you would earn a total of 39.00 from holding ADRIATIC METALS LS 013355 or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| GigaMedia |
| ADRIATIC METALS LS |
GigaMedia and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and ADRIATIC METALS
The main advantage of trading using opposite GigaMedia and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| GigaMedia vs. JJ SNACK FOODS | GigaMedia vs. MOLSON RS BEVERAGE | GigaMedia vs. Astral Foods Limited | GigaMedia vs. Zijin Mining Group |
| ADRIATIC METALS vs. Rio Tinto Group | ADRIATIC METALS vs. Liontown Resources Limited | ADRIATIC METALS vs. American Lithium 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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