Correlation Between GigaMedia and CLEANTECH LITH
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CLEANTECH LITH 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 CLEANTECH LITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CLEANTECH LITH LS, you can compare the effects of market volatilities on GigaMedia and CLEANTECH LITH 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 CLEANTECH LITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CLEANTECH LITH.
Diversification Opportunities for GigaMedia and CLEANTECH LITH
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GigaMedia and CLEANTECH is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CLEANTECH LITH LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEANTECH LITH LS 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 CLEANTECH LITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEANTECH LITH LS has no effect on the direction of GigaMedia i.e., GigaMedia and CLEANTECH LITH go up and down completely randomly.
Pair Corralation between GigaMedia and CLEANTECH LITH
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.77 times more return on investment than CLEANTECH LITH. However, GigaMedia is 1.31 times less risky than CLEANTECH LITH. It trades about 0.18 of its potential returns per unit of risk. CLEANTECH LITH LS is currently generating about -0.27 per unit of risk. If you would invest 134.00 in GigaMedia on October 20, 2024 and sell it today you would earn a total of 14.00 from holding GigaMedia or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
GigaMedia vs. CLEANTECH LITH LS
Performance |
| Timeline |
| GigaMedia |
| CLEANTECH LITH LS |
GigaMedia and CLEANTECH LITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CLEANTECH LITH
The main advantage of trading using opposite GigaMedia and CLEANTECH LITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CLEANTECH LITH 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 CLEANTECH LITH will offset losses from the drop in CLEANTECH LITH's long position.| GigaMedia vs. Spirent Communications plc | GigaMedia vs. Ribbon Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Chengdu PUTIAN Telecommunications |
| CLEANTECH LITH vs. CVR Medical Corp | CLEANTECH LITH vs. Indutrade AB | CLEANTECH LITH vs. Tradeweb Markets | CLEANTECH LITH vs. Genertec Universal Medical |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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