Correlation Between GigaMedia and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both GigaMedia and Virtus Investment 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 Virtus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and Virtus Investment Partners, you can compare the effects of market volatilities on GigaMedia and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and Virtus Investment.
Diversification Opportunities for GigaMedia and Virtus Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GigaMedia and Virtus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of GigaMedia i.e., GigaMedia and Virtus Investment go up and down completely randomly.
Pair Corralation between GigaMedia and Virtus Investment
Assuming the 90 days trading horizon GigaMedia is expected to generate 3.08 times less return on investment than Virtus Investment. But when comparing it to its historical volatility, GigaMedia is 1.34 times less risky than Virtus Investment. It trades about 0.03 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15,700 in Virtus Investment Partners on August 25, 2024 and sell it today you would earn a total of 6,500 from holding Virtus Investment Partners or generate 41.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. Virtus Investment Partners
Performance |
| Timeline |
| GigaMedia |
| Virtus Investment |
GigaMedia and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and Virtus Investment
The main advantage of trading using opposite GigaMedia and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| GigaMedia vs. NXP Semiconductors NV | GigaMedia vs. Virtus Investment Partners | GigaMedia vs. Taiwan Semiconductor Manufacturing | GigaMedia vs. ECHO INVESTMENT ZY |
| Virtus Investment vs. The Bank of | Virtus Investment vs. Ares Management Corp | Virtus Investment vs. Superior Plus Corp | Virtus Investment vs. NMI Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |