Correlation Between GigaMedia and SL Green
Can any of the company-specific risk be diversified away by investing in both GigaMedia and SL Green 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 SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and SL Green Realty, you can compare the effects of market volatilities on GigaMedia and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and SL Green.
Diversification Opportunities for GigaMedia and SL Green
Very poor diversification
The 3 months correlation between GigaMedia and GEI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of GigaMedia i.e., GigaMedia and SL Green go up and down completely randomly.
Pair Corralation between GigaMedia and SL Green
Assuming the 90 days trading horizon GigaMedia is expected to generate 1.16 times more return on investment than SL Green. However, GigaMedia is 1.16 times more volatile than SL Green Realty. It trades about 0.19 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.16 per unit of risk. If you would invest 122.00 in GigaMedia on August 28, 2024 and sell it today you would earn a total of 11.00 from holding GigaMedia or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. SL Green Realty
Performance |
| Timeline |
| GigaMedia |
| SL Green Realty |
GigaMedia and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and SL Green
The main advantage of trading using opposite GigaMedia and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| GigaMedia vs. EAT WELL INVESTMENT | GigaMedia vs. GEAR4MUSIC LS 10 | GigaMedia vs. PACIFIC ONLINE | GigaMedia vs. BOS BETTER ONLINE |
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 CEOs Directory module to screen CEOs from public companies around the world.
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