Correlation Between GigaMedia and International Game
Can any of the company-specific risk be diversified away by investing in both GigaMedia and International Game 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 International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and International Game Technology, you can compare the effects of market volatilities on GigaMedia and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and International Game.
Diversification Opportunities for GigaMedia and International Game
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GigaMedia and International is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of GigaMedia i.e., GigaMedia and International Game go up and down completely randomly.
Pair Corralation between GigaMedia and International Game
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.14 times more return on investment than International Game. However, GigaMedia is 1.14 times more volatile than International Game Technology. It trades about 0.11 of its potential returns per unit of risk. International Game Technology is currently generating about -0.09 per unit of risk. If you would invest 114.00 in GigaMedia on November 2, 2024 and sell it today you would earn a total of 27.00 from holding GigaMedia or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. International Game Technology
Performance |
| Timeline |
| GigaMedia |
| International Game |
GigaMedia and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and International Game
The main advantage of trading using opposite GigaMedia and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| GigaMedia vs. Fukuyama Transporting Co | GigaMedia vs. Gaztransport Technigaz SA | GigaMedia vs. BII Railway Transportation | GigaMedia vs. Semiconductor Manufacturing International |
| International Game vs. Flutter Entertainment PLC | International Game vs. Churchill Downs Incorporated | International Game vs. La Franaise des | International Game vs. Scientific Games |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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