Correlation Between GigaMedia and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Hyster-Yale Materials 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 Hyster-Yale Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Hyster Yale Materials Handling, you can compare the effects of market volatilities on GigaMedia and Hyster-Yale Materials 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 Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Hyster-Yale Materials.
Diversification Opportunities for GigaMedia and Hyster-Yale Materials
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GigaMedia and Hyster-Yale is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster-Yale Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of GigaMedia i.e., GigaMedia and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between GigaMedia and Hyster-Yale Materials
Assuming the 90 days trading horizon GigaMedia is expected to generate 3.49 times less return on investment than Hyster-Yale Materials. But when comparing it to its historical volatility, GigaMedia is 2.11 times less risky than Hyster-Yale Materials. It trades about 0.04 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,512 in Hyster Yale Materials Handling on September 3, 2024 and sell it today you would earn a total of 2,738 from holding Hyster Yale Materials Handling or generate 109.0% 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. Hyster Yale Materials Handling
Performance |
| Timeline |
| GigaMedia |
| Hyster Yale Materials |
GigaMedia and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Hyster-Yale Materials
The main advantage of trading using opposite GigaMedia and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Hyster-Yale Materials 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 Hyster-Yale Materials will offset losses from the drop in Hyster-Yale Materials' long position.| GigaMedia vs. Autohome ADR | GigaMedia vs. Sixt Leasing SE | GigaMedia vs. Canadian Utilities Limited | GigaMedia vs. DFS Furniture PLC |
| Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials vs. NMI Holdings | Hyster-Yale Materials vs. Origin Agritech | Hyster-Yale Materials vs. SIVERS SEMICONDUCTORS AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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