Correlation Between GigaMedia and HOCHSCHILD MINING
Can any of the company-specific risk be diversified away by investing in both GigaMedia and HOCHSCHILD MINING 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 HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and HOCHSCHILD MINING, you can compare the effects of market volatilities on GigaMedia and HOCHSCHILD MINING 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 HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and HOCHSCHILD MINING.
Diversification Opportunities for GigaMedia and HOCHSCHILD MINING
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaMedia and HOCHSCHILD is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING 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 HOCHSCHILD MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOCHSCHILD MINING has no effect on the direction of GigaMedia i.e., GigaMedia and HOCHSCHILD MINING go up and down completely randomly.
Pair Corralation between GigaMedia and HOCHSCHILD MINING
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.53 times more return on investment than HOCHSCHILD MINING. However, GigaMedia is 1.88 times less risky than HOCHSCHILD MINING. It trades about 0.2 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about -0.02 per unit of risk. If you would invest 124.00 in GigaMedia on September 2, 2024 and sell it today you would earn a total of 9.00 from holding GigaMedia or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. HOCHSCHILD MINING
Performance |
| Timeline |
| GigaMedia |
| HOCHSCHILD MINING |
GigaMedia and HOCHSCHILD MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and HOCHSCHILD MINING
The main advantage of trading using opposite GigaMedia and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, HOCHSCHILD MINING 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 HOCHSCHILD MINING will offset losses from the drop in HOCHSCHILD MINING's long position.| GigaMedia vs. Boyd Gaming | GigaMedia vs. Charter Communications | GigaMedia vs. GAMESTOP | GigaMedia vs. FRACTAL GAMING GROUP |
| HOCHSCHILD MINING vs. SIVERS SEMICONDUCTORS AB | HOCHSCHILD MINING vs. Darden Restaurants | HOCHSCHILD MINING vs. Reliance Steel Aluminum | HOCHSCHILD MINING vs. Q2M Managementberatung AG |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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