Correlation Between GigaMedia and SOCKET MOBILE
Can any of the company-specific risk be diversified away by investing in both GigaMedia and SOCKET MOBILE 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 SOCKET MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and SOCKET MOBILE NEW, you can compare the effects of market volatilities on GigaMedia and SOCKET MOBILE 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 SOCKET MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and SOCKET MOBILE.
Diversification Opportunities for GigaMedia and SOCKET MOBILE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GigaMedia and SOCKET is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and SOCKET MOBILE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCKET MOBILE NEW 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 SOCKET MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCKET MOBILE NEW has no effect on the direction of GigaMedia i.e., GigaMedia and SOCKET MOBILE go up and down completely randomly.
Pair Corralation between GigaMedia and SOCKET MOBILE
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.45 times more return on investment than SOCKET MOBILE. However, GigaMedia is 2.2 times less risky than SOCKET MOBILE. It trades about 0.03 of its potential returns per unit of risk. SOCKET MOBILE NEW is currently generating about 0.0 per unit of risk. If you would invest 122.00 in GigaMedia on November 3, 2024 and sell it today you would earn a total of 19.00 from holding GigaMedia or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. SOCKET MOBILE NEW
Performance |
| Timeline |
| GigaMedia |
| SOCKET MOBILE NEW |
GigaMedia and SOCKET MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and SOCKET MOBILE
The main advantage of trading using opposite GigaMedia and SOCKET MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, SOCKET MOBILE 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 SOCKET MOBILE will offset losses from the drop in SOCKET MOBILE's long position.| GigaMedia vs. Autohome ADR | GigaMedia vs. Semiconductor Manufacturing International | GigaMedia vs. The Home Depot | GigaMedia vs. DFS Furniture PLC |
| SOCKET MOBILE vs. Siemens Healthineers AG | SOCKET MOBILE vs. SHIP HEALTHCARE HLDGINC | SOCKET MOBILE vs. Erste Group Bank | SOCKET MOBILE vs. Webster Financial |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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