Correlation Between GigaMedia and AEON MALL
Can any of the company-specific risk be diversified away by investing in both GigaMedia and AEON MALL 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 AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and AEON MALL LTD, you can compare the effects of market volatilities on GigaMedia and AEON MALL 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 AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and AEON MALL.
Diversification Opportunities for GigaMedia and AEON MALL
Excellent diversification
The 3 months correlation between GigaMedia and AEON is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL 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 AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of GigaMedia i.e., GigaMedia and AEON MALL go up and down completely randomly.
Pair Corralation between GigaMedia and AEON MALL
Assuming the 90 days trading horizon GigaMedia is expected to under-perform the AEON MALL. But the stock apears to be less risky and, when comparing its historical volatility, GigaMedia is 2.14 times less risky than AEON MALL. The stock trades about -0.11 of its potential returns per unit of risk. The AEON MALL LTD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,200 in AEON MALL LTD on September 19, 2024 and sell it today you would earn a total of 0.00 from holding AEON MALL LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. AEON MALL LTD
Performance |
| Timeline |
| GigaMedia |
| AEON MALL LTD |
GigaMedia and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and AEON MALL
The main advantage of trading using opposite GigaMedia and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, AEON MALL 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 AEON MALL will offset losses from the drop in AEON MALL's long position.The idea behind GigaMedia and AEON MALL LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AEON MALL vs. TROPHY GAMES DEV | AEON MALL vs. GigaMedia | AEON MALL vs. The Trade Desk | AEON MALL vs. Carsales |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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