Correlation Between GigaMedia and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both GigaMedia and COMBA TELECOM 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 COMBA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and COMBA TELECOM SYST, you can compare the effects of market volatilities on GigaMedia and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and COMBA TELECOM.
Diversification Opportunities for GigaMedia and COMBA TELECOM
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GigaMedia and COMBA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of GigaMedia i.e., GigaMedia and COMBA TELECOM go up and down completely randomly.
Pair Corralation between GigaMedia and COMBA TELECOM
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.69 times more return on investment than COMBA TELECOM. However, GigaMedia is 1.44 times less risky than COMBA TELECOM. It trades about 0.04 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about 0.02 per unit of risk. If you would invest 108.00 in GigaMedia on September 30, 2024 and sell it today you would earn a total of 32.00 from holding GigaMedia or generate 29.63% 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. COMBA TELECOM SYST
Performance |
| Timeline |
| GigaMedia |
| COMBA TELECOM SYST |
GigaMedia and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and COMBA TELECOM
The main advantage of trading using opposite GigaMedia and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| GigaMedia vs. SALESFORCE INC CDR | GigaMedia vs. Tradeweb Markets | GigaMedia vs. Carsales | GigaMedia vs. Vastned Retail NV |
| COMBA TELECOM vs. Carsales | COMBA TELECOM vs. NISSAN CHEMICAL IND | COMBA TELECOM vs. Sanyo Chemical Industries | COMBA TELECOM vs. Caseys General Stores |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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