Correlation Between Ping An and GigaMedia

Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ping An Healthcare and GigaMedia, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and GigaMedia.

Diversification Opportunities for Ping An and GigaMedia

0.0

Correlation Coefficient

Ping An  GigaMedia

Pay attention - limited upside

The 3 months correlation between Ping and GigaMedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Healthcare and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and Ping An 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 Ping An Healthcare 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 Ping An i.e., Ping An and GigaMedia go up and down completely randomly.

Pair Corralation between Ping An and GigaMedia

If you would invest  134.00  in GigaMedia on December 22, 2024 and sell it today you would earn a total of  7.00  from holding GigaMedia or generate 5.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ping An Healthcare  vs.  GigaMedia

Ping An Healthcare

Risk-Adjusted Performance

Insignificant

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ping An is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GigaMedia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GigaMedia may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ping An and GigaMedia

The main advantage of trading using opposite Ping An and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.

The idea behind Ping An Healthcare and GigaMedia 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.