Correlation Between SAXLUND GROUP and GigaMedia

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

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

Diversification Opportunities for SAXLUND GROUP and GigaMedia

-0.4

Correlation Coefficient

SAXLUND GROUP  GigaMedia

Very good diversification

The 3 months correlation between SAXLUND and GigaMedia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SAXLUND GROUP AB and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and SAXLUND GROUP 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 SAXLUND GROUP AB 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 SAXLUND GROUP i.e., SAXLUND GROUP and GigaMedia go up and down completely randomly.

Pair Corralation between SAXLUND GROUP and GigaMedia

If you would invest  133.00  in GigaMedia on September 24, 2024 and sell it today you would earn a total of  1.00  from holding GigaMedia or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

SAXLUND GROUP AB  vs.  GigaMedia

SAXLUND GROUP AB

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAXLUND GROUP AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SAXLUND GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

GigaMedia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GigaMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAXLUND GROUP and GigaMedia

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

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.