Correlation Between KENEDIX OFFICE and GigaMedia
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and GigaMedia 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 KENEDIX OFFICE and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and GigaMedia, you can compare the effects of market volatilities on KENEDIX OFFICE and GigaMedia 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 KENEDIX OFFICE with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and GigaMedia.
Diversification Opportunities for KENEDIX OFFICE and GigaMedia
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KENEDIX and GigaMedia is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and GigaMedia go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and GigaMedia
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the GigaMedia. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 1.55 times less risky than GigaMedia. The stock trades about -0.1 of its potential returns per unit of risk. The GigaMedia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 115.00 in GigaMedia on September 12, 2024 and sell it today you would earn a total of 18.00 from holding GigaMedia or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. GigaMedia
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| GigaMedia |
KENEDIX OFFICE and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and GigaMedia
The main advantage of trading using opposite KENEDIX OFFICE and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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