Correlation Between GigaMedia and ATOSS Software
Can any of the company-specific risk be diversified away by investing in both GigaMedia and ATOSS Software 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 ATOSS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and ATOSS Software SE, you can compare the effects of market volatilities on GigaMedia and ATOSS Software 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 ATOSS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and ATOSS Software.
Diversification Opportunities for GigaMedia and ATOSS Software
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GigaMedia and ATOSS is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and ATOSS Software SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS Software SE 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 ATOSS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS Software SE has no effect on the direction of GigaMedia i.e., GigaMedia and ATOSS Software go up and down completely randomly.
Pair Corralation between GigaMedia and ATOSS Software
Assuming the 90 days trading horizon GigaMedia is expected to generate 3.77 times less return on investment than ATOSS Software. But when comparing it to its historical volatility, GigaMedia is 1.23 times less risky than ATOSS Software. It trades about 0.02 of its potential returns per unit of risk. ATOSS Software SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,976 in ATOSS Software SE on November 2, 2024 and sell it today you would earn a total of 3,584 from holding ATOSS Software SE or generate 44.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. ATOSS Software SE
Performance |
| Timeline |
| GigaMedia |
| ATOSS Software SE |
GigaMedia and ATOSS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and ATOSS Software
The main advantage of trading using opposite GigaMedia and ATOSS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, ATOSS Software 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 ATOSS Software will offset losses from the drop in ATOSS Software's long position.| GigaMedia vs. FIREWEED METALS P | GigaMedia vs. ADRIATIC METALS LS 013355 | GigaMedia vs. PENN Entertainment | GigaMedia vs. Nippon Light Metal |
| ATOSS Software vs. Warner Music Group | ATOSS Software vs. CHINA TONTINE WINES | ATOSS Software vs. VIVA WINE GROUP | ATOSS Software vs. Tencent Music Entertainment |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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