Correlation Between GigaMedia and CH Robinson
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CH Robinson 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 CH Robinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CH Robinson Worldwide, you can compare the effects of market volatilities on GigaMedia and CH Robinson 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 CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CH Robinson.
Diversification Opportunities for GigaMedia and CH Robinson
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaMedia and CH1A is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide 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 CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of GigaMedia i.e., GigaMedia and CH Robinson go up and down completely randomly.
Pair Corralation between GigaMedia and CH Robinson
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.72 times more return on investment than CH Robinson. However, GigaMedia is 1.38 times less risky than CH Robinson. It trades about 0.04 of its potential returns per unit of risk. CH Robinson Worldwide is currently generating about 0.03 per unit of risk. If you would invest 107.00 in GigaMedia on September 5, 2024 and sell it today you would earn a total of 26.00 from holding GigaMedia or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. CH Robinson Worldwide
Performance |
| Timeline |
| GigaMedia |
| CH Robinson Worldwide |
GigaMedia and CH Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CH Robinson
The main advantage of trading using opposite GigaMedia and CH Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CH Robinson 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 CH Robinson will offset losses from the drop in CH Robinson's long position.| GigaMedia vs. VARIOUS EATERIES LS | GigaMedia vs. ETFS Coffee ETC | GigaMedia vs. North American Construction | GigaMedia vs. KINGBOARD CHEMICAL |
| CH Robinson vs. DAIRY FARM INTL | CH Robinson vs. VARIOUS EATERIES LS | CH Robinson vs. Darden Restaurants | CH Robinson vs. AWILCO DRILLING PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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