Correlation Between GigaMedia and Scotts Miracle-Gro
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Scotts Miracle-Gro 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 Scotts Miracle-Gro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and The Scotts Miracle Gro, you can compare the effects of market volatilities on GigaMedia and Scotts Miracle-Gro 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 Scotts Miracle-Gro. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Scotts Miracle-Gro.
Diversification Opportunities for GigaMedia and Scotts Miracle-Gro
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GigaMedia and Scotts is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and The Scotts Miracle Gro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotts Miracle-Gro 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 Scotts Miracle-Gro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotts Miracle-Gro has no effect on the direction of GigaMedia i.e., GigaMedia and Scotts Miracle-Gro go up and down completely randomly.
Pair Corralation between GigaMedia and Scotts Miracle-Gro
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.71 times more return on investment than Scotts Miracle-Gro. However, GigaMedia is 1.42 times less risky than Scotts Miracle-Gro. It trades about 0.12 of its potential returns per unit of risk. The Scotts Miracle Gro is currently generating about 0.04 per unit of risk. If you would invest 113.00 in GigaMedia on October 21, 2024 and sell it today you would earn a total of 35.00 from holding GigaMedia or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. The Scotts Miracle Gro
Performance |
| Timeline |
| GigaMedia |
| Scotts Miracle-Gro |
GigaMedia and Scotts Miracle-Gro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Scotts Miracle-Gro
The main advantage of trading using opposite GigaMedia and Scotts Miracle-Gro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Scotts Miracle-Gro 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 Scotts Miracle-Gro will offset losses from the drop in Scotts Miracle-Gro's long position.| GigaMedia vs. Spirent Communications plc | GigaMedia vs. Ribbon Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Chengdu PUTIAN Telecommunications |
| Scotts Miracle-Gro vs. Eurasia Mining Plc | Scotts Miracle-Gro vs. Calibre Mining Corp | Scotts Miracle-Gro vs. IMPERIAL TOBACCO | Scotts Miracle-Gro vs. Zijin Mining Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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