Correlation Between GigaMedia and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both GigaMedia and CHINA HUARONG 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 CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on GigaMedia and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and CHINA HUARONG.
Diversification Opportunities for GigaMedia and CHINA HUARONG
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GigaMedia and CHINA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of GigaMedia i.e., GigaMedia and CHINA HUARONG go up and down completely randomly.
Pair Corralation between GigaMedia and CHINA HUARONG
Assuming the 90 days trading horizon GigaMedia is expected to generate 73.23 times less return on investment than CHINA HUARONG. But when comparing it to its historical volatility, GigaMedia is 25.12 times less risky than CHINA HUARONG. It trades about 0.04 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.60 in CHINA HUARONG ENERHD 50 on October 13, 2024 and sell it today you would lose (0.30) from holding CHINA HUARONG ENERHD 50 or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaMedia vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| GigaMedia |
| CHINA HUARONG ENERHD |
GigaMedia and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaMedia and CHINA HUARONG
The main advantage of trading using opposite GigaMedia and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| GigaMedia vs. Carnegie Clean Energy | GigaMedia vs. BOS BETTER ONLINE | GigaMedia vs. CODERE ONLINE LUX | GigaMedia vs. CarsalesCom |
| CHINA HUARONG vs. HK Electric Investments | CHINA HUARONG vs. Gladstone Investment | CHINA HUARONG vs. GigaMedia | CHINA HUARONG vs. PROSIEBENSAT1 MEDIADR4 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |