Correlation Between GigaMedia and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both GigaMedia and WT OFFSHORE 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 WT OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and WT OFFSHORE, you can compare the effects of market volatilities on GigaMedia and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and WT OFFSHORE.
Diversification Opportunities for GigaMedia and WT OFFSHORE
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GigaMedia and UWV is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of GigaMedia i.e., GigaMedia and WT OFFSHORE go up and down completely randomly.
Pair Corralation between GigaMedia and WT OFFSHORE
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.51 times more return on investment than WT OFFSHORE. However, GigaMedia is 1.98 times less risky than WT OFFSHORE. It trades about 0.2 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.04 per unit of risk. If you would invest 124.00 in GigaMedia on September 2, 2024 and sell it today you would earn a total of 9.00 from holding GigaMedia or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. WT OFFSHORE
Performance |
| Timeline |
| GigaMedia |
| WT OFFSHORE |
GigaMedia and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and WT OFFSHORE
The main advantage of trading using opposite GigaMedia and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| GigaMedia vs. Boyd Gaming | GigaMedia vs. Charter Communications | GigaMedia vs. GAMESTOP | GigaMedia vs. FRACTAL GAMING GROUP |
| WT OFFSHORE vs. SK TELECOM TDADR | WT OFFSHORE vs. Rogers Communications | WT OFFSHORE vs. Highlight Communications AG | WT OFFSHORE vs. Singapore Telecommunications Limited |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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