Correlation Between GigaMedia and Gold Road
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Gold Road 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 Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Gold Road Resources, you can compare the effects of market volatilities on GigaMedia and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Gold Road.
Diversification Opportunities for GigaMedia and Gold Road
Very weak diversification
The 3 months correlation between GigaMedia and Gold is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of GigaMedia i.e., GigaMedia and Gold Road go up and down completely randomly.
Pair Corralation between GigaMedia and Gold Road
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.26 times less return on investment than Gold Road. But when comparing it to its historical volatility, GigaMedia is 1.82 times less risky than Gold Road. It trades about 0.04 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 108.00 in Gold Road Resources on October 16, 2024 and sell it today you would earn a total of 21.00 from holding Gold Road Resources or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GigaMedia vs. Gold Road Resources
Performance |
| Timeline |
| GigaMedia |
| Gold Road Resources |
GigaMedia and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Gold Road
The main advantage of trading using opposite GigaMedia and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| GigaMedia vs. Zijin Mining Group | GigaMedia vs. KIMBALL ELECTRONICS | GigaMedia vs. Stag Industrial | GigaMedia vs. STORE ELECTRONIC |
| Gold Road vs. Pure Storage | Gold Road vs. Monument Mining Limited | Gold Road vs. Linedata Services SA | Gold Road vs. Teradata Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |