Correlation Between GigaMedia and ACCSYS TECHPLC

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

By analyzing existing cross correlation between GigaMedia and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on GigaMedia and ACCSYS TECHPLC 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 ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaMedia and ACCSYS TECHPLC.

Diversification Opportunities for GigaMedia and ACCSYS TECHPLC

-0.78

Correlation Coefficient

GigaMedia  ACCSYS TECHPLC

Pay attention - limited upside

The 3 months correlation between GigaMedia and ACCSYS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO 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 ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of GigaMedia i.e., GigaMedia and ACCSYS TECHPLC go up and down completely randomly.

Pair Corralation between GigaMedia and ACCSYS TECHPLC

Assuming the 90 days trading horizon GigaMedia is expected to generate 1.64 times more return on investment than ACCSYS TECHPLC. However, GigaMedia is 1.64 times more volatile than ACCSYS TECHPLC EO. It trades about 0.32 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.05 per unit of risk. If you would invest  133.00  in GigaMedia on October 10, 2024 and sell it today you would earn a total of  24.00  from holding GigaMedia or generate 18.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GigaMedia  vs.  ACCSYS TECHPLC EO

GigaMedia

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 17 (%) 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.

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GigaMedia and ACCSYS TECHPLC

The main advantage of trading using opposite GigaMedia and ACCSYS TECHPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaMedia position performs unexpectedly, ACCSYS TECHPLC 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 ACCSYS TECHPLC will offset losses from the drop in ACCSYS TECHPLC's long position.

The idea behind GigaMedia and ACCSYS TECHPLC EO 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.