Correlation Between GigaMedia and PLAYTIKA HOLDING
Can any of the company-specific risk be diversified away by investing in both GigaMedia and PLAYTIKA HOLDING 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 GigaMedia and PLAYTIKA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaMedia and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on GigaMedia and PLAYTIKA HOLDING 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 GigaMedia with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and PLAYTIKA HOLDING.
Diversification Opportunities for GigaMedia and PLAYTIKA HOLDING
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GigaMedia and PLAYTIKA is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and GigaMedia 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 GigaMedia are associated (or correlated) with PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of GigaMedia i.e., GigaMedia and PLAYTIKA HOLDING go up and down completely randomly.
Pair Corralation between GigaMedia and PLAYTIKA HOLDING
Assuming the 90 days trading horizon GigaMedia is expected to generate 0.92 times more return on investment than PLAYTIKA HOLDING. However, GigaMedia is 1.09 times less risky than PLAYTIKA HOLDING. It trades about 0.13 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.1 per unit of risk. If you would invest 115.00 in GigaMedia on September 18, 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 Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
GigaMedia vs. PLAYTIKA HOLDING DL 01
Performance |
Timeline |
GigaMedia |
PLAYTIKA HOLDING |
GigaMedia and PLAYTIKA HOLDING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GigaMedia and PLAYTIKA HOLDING
The main advantage of trading using opposite GigaMedia and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, PLAYTIKA HOLDING 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 PLAYTIKA HOLDING will offset losses from the drop in PLAYTIKA HOLDING's long position.The idea behind GigaMedia and PLAYTIKA HOLDING DL 01 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.PLAYTIKA HOLDING vs. NEXON Co | PLAYTIKA HOLDING vs. Take Two Interactive Software | PLAYTIKA HOLDING vs. Superior Plus Corp | PLAYTIKA HOLDING vs. SIVERS SEMICONDUCTORS AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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