Correlation Between GigaMedia and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CEOTRONICS 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 CEOTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CEOTRONICS, you can compare the effects of market volatilities on GigaMedia and CEOTRONICS 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 CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CEOTRONICS.
Diversification Opportunities for GigaMedia and CEOTRONICS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GigaMedia and CEOTRONICS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS 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 CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of GigaMedia i.e., GigaMedia and CEOTRONICS go up and down completely randomly.
Pair Corralation between GigaMedia and CEOTRONICS
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.54 times more return on investment than CEOTRONICS. However, GigaMedia is 1.84 times less risky than CEOTRONICS. It trades about 0.08 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.04 per unit of risk. If you would invest 115.00 in GigaMedia on September 5, 2024 and sell it today you would earn a total of 18.00 from holding GigaMedia or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. CEOTRONICS
Performance |
| Timeline |
| GigaMedia |
| CEOTRONICS |
GigaMedia and CEOTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CEOTRONICS
The main advantage of trading using opposite GigaMedia and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CEOTRONICS 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 CEOTRONICS will offset losses from the drop in CEOTRONICS's long position.| GigaMedia vs. VARIOUS EATERIES LS | GigaMedia vs. ETFS Coffee ETC | GigaMedia vs. North American Construction | GigaMedia vs. KINGBOARD CHEMICAL |
| CEOTRONICS vs. TOTAL GABON | CEOTRONICS vs. Walgreens Boots Alliance | CEOTRONICS vs. Peak Resources Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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