Correlation Between GigaMedia and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CDL INVESTMENT 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 CDL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CDL INVESTMENT, you can compare the effects of market volatilities on GigaMedia and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CDL INVESTMENT.
Diversification Opportunities for GigaMedia and CDL INVESTMENT
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GigaMedia and CDL is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of GigaMedia i.e., GigaMedia and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between GigaMedia and CDL INVESTMENT
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.04 times more return on investment than CDL INVESTMENT. However, GigaMedia is 1.04 times more volatile than CDL INVESTMENT. It trades about 0.19 of its potential returns per unit of risk. CDL INVESTMENT is currently generating about 0.06 per unit of risk. If you would invest 122.00 in GigaMedia on August 27, 2024 and sell it today you would earn a total of 11.00 from holding GigaMedia or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. CDL INVESTMENT
Performance |
| Timeline |
| GigaMedia |
| CDL INVESTMENT |
GigaMedia and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CDL INVESTMENT
The main advantage of trading using opposite GigaMedia and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.| GigaMedia vs. EAT WELL INVESTMENT | GigaMedia vs. GEAR4MUSIC LS 10 | GigaMedia vs. PACIFIC ONLINE | GigaMedia vs. BOS BETTER ONLINE |
| CDL INVESTMENT vs. TreeHouse Foods | CDL INVESTMENT vs. AUSNUTRIA DAIRY | CDL INVESTMENT vs. British American Tobacco | CDL INVESTMENT vs. Dairy Farm International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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