Correlation Between TOHOKU EL and GigaMedia
Can any of the company-specific risk be diversified away by investing in both TOHOKU EL 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 TOHOKU EL and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOHOKU EL PWR and GigaMedia, you can compare the effects of market volatilities on TOHOKU EL 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 TOHOKU EL with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOHOKU EL and GigaMedia.
Diversification Opportunities for TOHOKU EL and GigaMedia
Pay attention - limited upside
The 3 months correlation between TOHOKU and GigaMedia is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding TOHOKU EL PWR and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and TOHOKU EL 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 TOHOKU EL PWR 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 TOHOKU EL i.e., TOHOKU EL and GigaMedia go up and down completely randomly.
Pair Corralation between TOHOKU EL and GigaMedia
Assuming the 90 days horizon TOHOKU EL PWR is expected to under-perform the GigaMedia. In addition to that, TOHOKU EL is 4.56 times more volatile than GigaMedia. It trades about -0.14 of its total potential returns per unit of risk. GigaMedia is currently generating about -0.05 per unit of volatility. If you would invest 135.00 in GigaMedia on September 13, 2024 and sell it today you would lose (1.00) from holding GigaMedia or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TOHOKU EL PWR vs. GigaMedia
Performance |
| Timeline |
| TOHOKU EL PWR |
| GigaMedia |
TOHOKU EL and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOHOKU EL and GigaMedia
The main advantage of trading using opposite TOHOKU EL and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOHOKU EL 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.| TOHOKU EL vs. HK Electric Investments | TOHOKU EL vs. DISTRICT METALS | TOHOKU EL vs. REINET INVESTMENTS SCA | TOHOKU EL vs. GREENX METALS LTD |
| GigaMedia vs. AOYAMA TRADING | GigaMedia vs. REGAL ASIAN INVESTMENTS | GigaMedia vs. AM EAGLE OUTFITTERS | GigaMedia vs. HK Electric Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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