Correlation Between GigaMedia and Mitsubishi Gas
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Mitsubishi Gas 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 Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on GigaMedia and Mitsubishi Gas 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 Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Mitsubishi Gas.
Diversification Opportunities for GigaMedia and Mitsubishi Gas
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GigaMedia and Mitsubishi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical 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 Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of GigaMedia i.e., GigaMedia and Mitsubishi Gas go up and down completely randomly.
Pair Corralation between GigaMedia and Mitsubishi Gas
Assuming the 90 days trading horizon GigaMedia is expected to generate 2.3 times more return on investment than Mitsubishi Gas. However, GigaMedia is 2.3 times more volatile than Mitsubishi Gas Chemical. It trades about 0.03 of its potential returns per unit of risk. Mitsubishi Gas Chemical is currently generating about -0.13 per unit of risk. If you would invest 140.00 in GigaMedia on November 1, 2024 and sell it today you would earn a total of 1.00 from holding GigaMedia or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Mitsubishi Gas Chemical
Performance |
| Timeline |
| GigaMedia |
| Mitsubishi Gas Chemical |
GigaMedia and Mitsubishi Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Mitsubishi Gas
The main advantage of trading using opposite GigaMedia and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Mitsubishi Gas 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 Mitsubishi Gas will offset losses from the drop in Mitsubishi Gas' long position.| GigaMedia vs. Apollo Investment Corp | GigaMedia vs. AOYAMA TRADING | GigaMedia vs. betterU Education Corp | GigaMedia vs. Gladstone Investment |
| Mitsubishi Gas vs. STRAYER EDUCATION | Mitsubishi Gas vs. betterU Education Corp | Mitsubishi Gas vs. ASPEN TECHINC DL | Mitsubishi Gas vs. VELA TECHNOLPLC LS 0001 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |