Correlation Between GigaMedia and UNICREDIT SPA
Can any of the company-specific risk be diversified away by investing in both GigaMedia and UNICREDIT SPA 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 UNICREDIT SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and UNICREDIT SPA ADR, you can compare the effects of market volatilities on GigaMedia and UNICREDIT SPA 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 UNICREDIT SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and UNICREDIT SPA.
Diversification Opportunities for GigaMedia and UNICREDIT SPA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GigaMedia and UNICREDIT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and UNICREDIT SPA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICREDIT SPA ADR 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 UNICREDIT SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICREDIT SPA ADR has no effect on the direction of GigaMedia i.e., GigaMedia and UNICREDIT SPA go up and down completely randomly.
Pair Corralation between GigaMedia and UNICREDIT SPA
Assuming the 90 days trading horizon GigaMedia is expected to generate 5.28 times less return on investment than UNICREDIT SPA. But when comparing it to its historical volatility, GigaMedia is 1.42 times less risky than UNICREDIT SPA. It trades about 0.03 of its potential returns per unit of risk. UNICREDIT SPA ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 684.00 in UNICREDIT SPA ADR on October 20, 2024 and sell it today you would earn a total of 1,336 from holding UNICREDIT SPA ADR or generate 195.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. UNICREDIT SPA ADR
Performance |
| Timeline |
| GigaMedia |
| UNICREDIT SPA ADR |
GigaMedia and UNICREDIT SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and UNICREDIT SPA
The main advantage of trading using opposite GigaMedia and UNICREDIT SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, UNICREDIT SPA 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 UNICREDIT SPA will offset losses from the drop in UNICREDIT SPA's long position.| GigaMedia vs. VULCAN MATERIALS | GigaMedia vs. APPLIED MATERIALS | GigaMedia vs. Applied Materials | GigaMedia vs. Nordic Semiconductor ASA |
| UNICREDIT SPA vs. GigaMedia | UNICREDIT SPA vs. Scientific Games | UNICREDIT SPA vs. Media and Games | UNICREDIT SPA vs. PLAYMATES TOYS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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