Correlation Between GigaMedia and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CNVISION MEDIA 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 CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CNVISION MEDIA, you can compare the effects of market volatilities on GigaMedia and CNVISION MEDIA 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 CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CNVISION MEDIA.
Diversification Opportunities for GigaMedia and CNVISION MEDIA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GigaMedia and CNVISION is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA 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 CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of GigaMedia i.e., GigaMedia and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between GigaMedia and CNVISION MEDIA
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.48 times more return on investment than CNVISION MEDIA. However, GigaMedia is 2.07 times less risky than CNVISION MEDIA. It trades about 0.0 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.0 per unit of risk. If you would invest 138.00 in GigaMedia on September 1, 2024 and sell it today you would lose (5.00) from holding GigaMedia or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. CNVISION MEDIA
Performance |
| Timeline |
| GigaMedia |
| CNVISION MEDIA |
GigaMedia and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CNVISION MEDIA
The main advantage of trading using opposite GigaMedia and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CNVISION MEDIA 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| GigaMedia vs. Charter Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Singapore Telecommunications Limited | GigaMedia vs. QUEEN S ROAD |
| CNVISION MEDIA vs. SIVERS SEMICONDUCTORS AB | CNVISION MEDIA vs. Darden Restaurants | CNVISION MEDIA vs. Reliance Steel Aluminum | CNVISION MEDIA vs. Q2M Managementberatung AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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