Correlation Between SohuCom and Giga Media
Can any of the company-specific risk be diversified away by investing in both SohuCom and Giga Media 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 SohuCom and Giga Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SohuCom and Giga Media, you can compare the effects of market volatilities on SohuCom and Giga Media 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 SohuCom with a short position of Giga Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SohuCom and Giga Media.
Diversification Opportunities for SohuCom and Giga Media
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SohuCom and Giga is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SohuCom and Giga Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Media and SohuCom 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 SohuCom are associated (or correlated) with Giga Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Media has no effect on the direction of SohuCom i.e., SohuCom and Giga Media go up and down completely randomly.
Pair Corralation between SohuCom and Giga Media
Given the investment horizon of 90 days SohuCom is expected to under-perform the Giga Media. In addition to that, SohuCom is 2.35 times more volatile than Giga Media. It trades about -0.12 of its total potential returns per unit of risk. Giga Media is currently generating about 0.19 per unit of volatility. If you would invest 141.00 in Giga Media on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Giga Media or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SohuCom vs. Giga Media
Performance |
| Timeline |
| SohuCom |
| Giga Media |
SohuCom and Giga Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SohuCom and Giga Media
The main advantage of trading using opposite SohuCom and Giga Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SohuCom position performs unexpectedly, Giga Media 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 Giga Media will offset losses from the drop in Giga Media's long position.| SohuCom vs. Snail, Class A | SohuCom vs. Playstudios | SohuCom vs. Playtika Holding Corp | SohuCom vs. Doubledown Interactive Co |
| Giga Media vs. SohuCom | Giga Media vs. Snail, Class A | Giga Media vs. Playstudios | Giga Media vs. Playtika Holding Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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