Correlation Between GigaMedia and Zumtobel Group
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Zumtobel Group 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 Zumtobel Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Zumtobel Group AG, you can compare the effects of market volatilities on GigaMedia and Zumtobel Group 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 Zumtobel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Zumtobel Group.
Diversification Opportunities for GigaMedia and Zumtobel Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GigaMedia and Zumtobel is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Zumtobel Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumtobel Group AG 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 Zumtobel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumtobel Group AG has no effect on the direction of GigaMedia i.e., GigaMedia and Zumtobel Group go up and down completely randomly.
Pair Corralation between GigaMedia and Zumtobel Group
Assuming the 90 days trading horizon GigaMedia is expected to generate 2.49 times more return on investment than Zumtobel Group. However, GigaMedia is 2.49 times more volatile than Zumtobel Group AG. It trades about 0.16 of its potential returns per unit of risk. Zumtobel Group AG is currently generating about 0.04 per unit of risk. If you would invest 134.00 in GigaMedia on October 24, 2024 and sell it today you would earn a total of 12.00 from holding GigaMedia or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Zumtobel Group AG
Performance |
| Timeline |
| GigaMedia |
| Zumtobel Group AG |
GigaMedia and Zumtobel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Zumtobel Group
The main advantage of trading using opposite GigaMedia and Zumtobel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Zumtobel Group 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 Zumtobel Group will offset losses from the drop in Zumtobel Group's long position.| GigaMedia vs. Singapore Telecommunications Limited | GigaMedia vs. Xinhua Winshare Publishing | GigaMedia vs. CRISPR Therapeutics AG | GigaMedia vs. INTERSHOP Communications Aktiengesellschaft |
| Zumtobel Group vs. SUN LIFE FINANCIAL | Zumtobel Group vs. TOMBADOR IRON LTD | Zumtobel Group vs. BANKINTER ADR 2007 | Zumtobel Group vs. KOBE STEEL LTD |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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