Correlation Between GigaMedia and Embotelladora Andina
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Embotelladora Andina 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 Embotelladora Andina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Embotelladora Andina SA, you can compare the effects of market volatilities on GigaMedia and Embotelladora Andina 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 Embotelladora Andina. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Embotelladora Andina.
Diversification Opportunities for GigaMedia and Embotelladora Andina
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GigaMedia and Embotelladora is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Embotelladora Andina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embotelladora Andina 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 Embotelladora Andina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embotelladora Andina has no effect on the direction of GigaMedia i.e., GigaMedia and Embotelladora Andina go up and down completely randomly.
Pair Corralation between GigaMedia and Embotelladora Andina
Assuming the 90 days trading horizon GigaMedia is expected to generate 2.34 times less return on investment than Embotelladora Andina. But when comparing it to its historical volatility, GigaMedia is 1.78 times less risky than Embotelladora Andina. It trades about 0.04 of its potential returns per unit of risk. Embotelladora Andina SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,064 in Embotelladora Andina SA on September 14, 2024 and sell it today you would earn a total of 616.00 from holding Embotelladora Andina SA or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Embotelladora Andina SA
Performance |
| Timeline |
| GigaMedia |
| Embotelladora Andina |
GigaMedia and Embotelladora Andina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Embotelladora Andina
The main advantage of trading using opposite GigaMedia and Embotelladora Andina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Embotelladora Andina 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 Embotelladora Andina will offset losses from the drop in Embotelladora Andina's long position.| GigaMedia vs. AOYAMA TRADING | GigaMedia vs. REGAL ASIAN INVESTMENTS | GigaMedia vs. AM EAGLE OUTFITTERS | GigaMedia vs. HK Electric Investments |
| Embotelladora Andina vs. Tradegate AG Wertpapierhandelsbank | Embotelladora Andina vs. Webster Financial | Embotelladora Andina vs. KAUFMAN ET BROAD | Embotelladora Andina vs. Regions Financial |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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