Correlation Between GigaMedia and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both GigaMedia and ULTRA CLEAN 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 ULTRA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on GigaMedia and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and ULTRA CLEAN.
Diversification Opportunities for GigaMedia and ULTRA CLEAN
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GigaMedia and ULTRA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of GigaMedia i.e., GigaMedia and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between GigaMedia and ULTRA CLEAN
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.95 times more return on investment than ULTRA CLEAN. However, GigaMedia is 1.06 times less risky than ULTRA CLEAN. It trades about 0.02 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.01 per unit of risk. If you would invest 140.00 in GigaMedia on November 3, 2024 and sell it today you would earn a total of 1.00 from holding GigaMedia or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| GigaMedia |
| ULTRA CLEAN HLDGS |
GigaMedia and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and ULTRA CLEAN
The main advantage of trading using opposite GigaMedia and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| GigaMedia vs. Autohome ADR | GigaMedia vs. Semiconductor Manufacturing International | GigaMedia vs. The Home Depot | GigaMedia vs. DFS Furniture PLC |
| ULTRA CLEAN vs. PKSHA TECHNOLOGY INC | ULTRA CLEAN vs. Yanzhou Coal Mining | ULTRA CLEAN vs. Globex Mining Enterprises | ULTRA CLEAN vs. BioNTech SE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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