Correlation Between GigaMedia and PUMA SE
Can any of the company-specific risk be diversified away by investing in both GigaMedia and PUMA SE 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 PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and PUMA SE UNSPADR, you can compare the effects of market volatilities on GigaMedia and PUMA SE 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 PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and PUMA SE.
Diversification Opportunities for GigaMedia and PUMA SE
Almost no diversification
The 3 months correlation between GigaMedia and PUMA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and PUMA SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE UNSPADR 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 PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE UNSPADR has no effect on the direction of GigaMedia i.e., GigaMedia and PUMA SE go up and down completely randomly.
Pair Corralation between GigaMedia and PUMA SE
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.32 times more return on investment than PUMA SE. However, GigaMedia is 3.11 times less risky than PUMA SE. It trades about -0.16 of its potential returns per unit of risk. PUMA SE UNSPADR is currently generating about -0.08 per unit of risk. If you would invest 136.00 in GigaMedia on September 19, 2024 and sell it today you would lose (3.00) from holding GigaMedia or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. PUMA SE UNSPADR
Performance |
| Timeline |
| GigaMedia |
| PUMA SE UNSPADR |
GigaMedia and PUMA SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and PUMA SE
The main advantage of trading using opposite GigaMedia and PUMA SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, PUMA SE 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 PUMA SE will offset losses from the drop in PUMA SE's long position.The idea behind GigaMedia and PUMA SE UNSPADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PUMA SE vs. Verizon Communications | PUMA SE vs. COMPUTERSHARE | PUMA SE vs. GigaMedia | PUMA SE vs. INTERSHOP Communications Aktiengesellschaft |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |