Correlation Between QINGCI GAMES and GigaMedia
Can any of the company-specific risk be diversified away by investing in both QINGCI GAMES 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 QINGCI GAMES and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QINGCI GAMES INC and GigaMedia, you can compare the effects of market volatilities on QINGCI GAMES 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 QINGCI GAMES with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of QINGCI GAMES and GigaMedia.
Diversification Opportunities for QINGCI GAMES and GigaMedia
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QINGCI and GigaMedia is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding QINGCI GAMES INC and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and QINGCI GAMES 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 QINGCI GAMES INC 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 QINGCI GAMES i.e., QINGCI GAMES and GigaMedia go up and down completely randomly.
Pair Corralation between QINGCI GAMES and GigaMedia
Assuming the 90 days horizon QINGCI GAMES is expected to generate 2.02 times less return on investment than GigaMedia. But when comparing it to its historical volatility, QINGCI GAMES INC is 1.17 times less risky than GigaMedia. It trades about 0.13 of its potential returns per unit of risk. GigaMedia is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 124.00 in GigaMedia on September 4, 2024 and sell it today you would earn a total of 10.00 from holding GigaMedia or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QINGCI GAMES INC vs. GigaMedia
Performance |
| Timeline |
| QINGCI GAMES INC |
| GigaMedia |
QINGCI GAMES and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QINGCI GAMES and GigaMedia
The main advantage of trading using opposite QINGCI GAMES and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QINGCI GAMES 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.| QINGCI GAMES vs. Nintendo Co | QINGCI GAMES vs. Nintendo Co | QINGCI GAMES vs. Sea Limited | QINGCI GAMES vs. Take Two Interactive Software |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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