Correlation Between GigaMedia and TOREX SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both GigaMedia and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and TOREX SEMICONDUCTOR LTD, you can compare the effects of market volatilities on GigaMedia and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and TOREX SEMICONDUCTOR.
Diversification Opportunities for GigaMedia and TOREX SEMICONDUCTOR
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GigaMedia and TOREX is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and TOREX SEMICONDUCTOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOREX SEMICONDUCTOR LTD has no effect on the direction of GigaMedia i.e., GigaMedia and TOREX SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between GigaMedia and TOREX SEMICONDUCTOR
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.16 times more return on investment than TOREX SEMICONDUCTOR. However, GigaMedia is 1.16 times more volatile than TOREX SEMICONDUCTOR LTD. It trades about 0.29 of its potential returns per unit of risk. TOREX SEMICONDUCTOR LTD is currently generating about 0.01 per unit of risk. If you would invest 133.00 in GigaMedia on October 14, 2024 and sell it today you would earn a total of 22.00 from holding GigaMedia or generate 16.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. TOREX SEMICONDUCTOR LTD
Performance |
| Timeline |
| GigaMedia |
| TOREX SEMICONDUCTOR LTD |
GigaMedia and TOREX SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and TOREX SEMICONDUCTOR
The main advantage of trading using opposite GigaMedia and TOREX SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR will offset losses from the drop in TOREX SEMICONDUCTOR's long position.| GigaMedia vs. FUYO GENERAL LEASE | GigaMedia vs. GOLD ROAD RES | GigaMedia vs. BRIT AMER TOBACCO | GigaMedia vs. United Rentals |
| TOREX SEMICONDUCTOR vs. Keck Seng Investments | TOREX SEMICONDUCTOR vs. Gladstone Investment | TOREX SEMICONDUCTOR vs. AOYAMA TRADING | TOREX SEMICONDUCTOR vs. GigaMedia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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