Correlation Between GigaMedia and Ramsay Générale

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

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

Diversification Opportunities for GigaMedia and Ramsay Générale

0.22

Correlation Coefficient

GigaMedia  Ramsay Générale

Modest diversification

The 3 months correlation between GigaMedia and Ramsay is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GigaMedia and Ramsay Gnrale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Gnrale de 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 Ramsay Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Gnrale de has no effect on the direction of GigaMedia i.e., GigaMedia and Ramsay Générale go up and down completely randomly.

Pair Corralation between GigaMedia and Ramsay Générale

Assuming the 90 days trading horizon GigaMedia is expected to generate 0.78 times more return on investment than Ramsay Générale. However, GigaMedia is 1.29 times less risky than Ramsay Générale. It trades about 0.04 of its potential returns per unit of risk. Ramsay Gnrale de is currently generating about -0.03 per unit of risk. If you would invest  122.00  in GigaMedia on October 10, 2024 and sell it today you would earn a total of  35.00  from holding GigaMedia or generate 28.69% return on investment over 90 days.

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

GigaMedia  vs.  Ramsay Gnrale de

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 weak basic indicators, GigaMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ramsay Gnrale de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramsay Gnrale de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ramsay Générale 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 Ramsay Générale

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

The idea behind GigaMedia and Ramsay Gnrale de 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.