Correlation Between GigaMedia and Unity Software
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Unity Software 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 Unity Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Unity Software, you can compare the effects of market volatilities on GigaMedia and Unity Software 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 Unity Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Unity Software.
Diversification Opportunities for GigaMedia and Unity Software
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GigaMedia and Unity is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of GigaMedia i.e., GigaMedia and Unity Software go up and down completely randomly.
Pair Corralation between GigaMedia and Unity Software
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.89 times more return on investment than Unity Software. However, GigaMedia is 1.12 times less risky than Unity Software. It trades about 0.16 of its potential returns per unit of risk. Unity Software is currently generating about 0.02 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Unity Software
Performance |
| Timeline |
| GigaMedia |
| Unity Software |
GigaMedia and Unity Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Unity Software
The main advantage of trading using opposite GigaMedia and Unity Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Unity Software 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 Unity Software will offset losses from the drop in Unity Software's long position.| GigaMedia vs. Singapore Telecommunications Limited | GigaMedia vs. Xinhua Winshare Publishing | GigaMedia vs. CRISPR Therapeutics AG | GigaMedia vs. INTERSHOP Communications Aktiengesellschaft |
| Unity Software vs. Quaker Chemical | Unity Software vs. GigaMedia | Unity Software vs. CHEMICAL INDUSTRIES | Unity Software vs. TIANDE CHEMICAL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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