Correlation Between GigaMedia and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Prosiebensat 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 Prosiebensat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Prosiebensat 1 Media, you can compare the effects of market volatilities on GigaMedia and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Prosiebensat.
Diversification Opportunities for GigaMedia and Prosiebensat
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GigaMedia and Prosiebensat is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of GigaMedia i.e., GigaMedia and Prosiebensat go up and down completely randomly.
Pair Corralation between GigaMedia and Prosiebensat
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.57 times more return on investment than Prosiebensat. However, GigaMedia is 1.75 times less risky than Prosiebensat. It trades about 0.04 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.01 per unit of risk. If you would invest 107.00 in GigaMedia on September 13, 2024 and sell it today you would earn a total of 27.00 from holding GigaMedia or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GigaMedia vs. Prosiebensat 1 Media
Performance |
| Timeline |
| GigaMedia |
| Prosiebensat 1 Media |
GigaMedia and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Prosiebensat
The main advantage of trading using opposite GigaMedia and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| GigaMedia vs. Titan Machinery | GigaMedia vs. AUST AGRICULTURAL | GigaMedia vs. North American Construction | GigaMedia vs. ALEFARM BREWING DK 05 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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