Correlation Between GigaMedia and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both GigaMedia and VARIOUS EATERIES 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 VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and VARIOUS EATERIES LS, you can compare the effects of market volatilities on GigaMedia and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and VARIOUS EATERIES.
Diversification Opportunities for GigaMedia and VARIOUS EATERIES
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GigaMedia and VARIOUS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of GigaMedia i.e., GigaMedia and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between GigaMedia and VARIOUS EATERIES
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.56 times more return on investment than VARIOUS EATERIES. However, GigaMedia is 1.56 times more volatile than VARIOUS EATERIES LS. It trades about 0.22 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about 0.21 per unit of risk. If you would invest 123.00 in GigaMedia on September 1, 2024 and sell it today you would earn a total of 10.00 from holding GigaMedia or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| GigaMedia |
| VARIOUS EATERIES |
GigaMedia and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and VARIOUS EATERIES
The main advantage of trading using opposite GigaMedia and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| GigaMedia vs. Charter Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Singapore Telecommunications Limited | GigaMedia vs. QUEEN S ROAD |
| VARIOUS EATERIES vs. USWE SPORTS AB | VARIOUS EATERIES vs. Fukuyama Transporting Co | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. NetSol Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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