Correlation Between GigaMedia and Molson Coors
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Molson Coors 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 Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Molson Coors Beverage, you can compare the effects of market volatilities on GigaMedia and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Molson Coors.
Diversification Opportunities for GigaMedia and Molson Coors
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GigaMedia and Molson is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of GigaMedia i.e., GigaMedia and Molson Coors go up and down completely randomly.
Pair Corralation between GigaMedia and Molson Coors
Assuming the 90 days trading horizon GigaMedia is expected to under-perform the Molson Coors. But the stock apears to be less risky and, when comparing its historical volatility, GigaMedia is 1.07 times less risky than Molson Coors. The stock trades about -0.48 of its potential returns per unit of risk. The Molson Coors Beverage is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 5,344 in Molson Coors Beverage on November 8, 2024 and sell it today you would lose (270.00) from holding Molson Coors Beverage or give up 5.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GigaMedia vs. Molson Coors Beverage
Performance |
| Timeline |
| GigaMedia |
| Molson Coors Beverage |
GigaMedia and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Molson Coors
The main advantage of trading using opposite GigaMedia and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| GigaMedia vs. New Residential Investment | GigaMedia vs. Fast Retailing Co | GigaMedia vs. CARSALESCOM | GigaMedia vs. SIDETRADE EO 1 |
| Molson Coors vs. Take Two Interactive Software | Molson Coors vs. Columbia Sportswear | Molson Coors vs. Wayside Technology Group | Molson Coors vs. InPlay Oil 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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