Correlation Between Xinhua Winshare and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare 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 Xinhua Winshare and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and GigaMedia, you can compare the effects of market volatilities on Xinhua Winshare 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 Xinhua Winshare with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and GigaMedia.
Diversification Opportunities for Xinhua Winshare and GigaMedia
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinhua and GigaMedia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Xinhua Winshare 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 Xinhua Winshare Publishing 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 Xinhua Winshare i.e., Xinhua Winshare and GigaMedia go up and down completely randomly.
Pair Corralation between Xinhua Winshare and GigaMedia
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to under-perform the GigaMedia. But the stock apears to be less risky and, when comparing its historical volatility, Xinhua Winshare Publishing is 1.32 times less risky than GigaMedia. The stock trades about -0.21 of its potential returns per unit of risk. The GigaMedia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 140.00 in GigaMedia on November 3, 2024 and sell it today you would earn a total of 1.00 from holding GigaMedia or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. GigaMedia
Performance |
| Timeline |
| Xinhua Winshare Publ |
| GigaMedia |
Xinhua Winshare and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and GigaMedia
The main advantage of trading using opposite Xinhua Winshare and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare 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.| Xinhua Winshare vs. SBI Insurance Group | Xinhua Winshare vs. REVO INSURANCE SPA | Xinhua Winshare vs. GOLD ROAD RES | Xinhua Winshare vs. Vienna Insurance Group |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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