Correlation Between TRADEDOUBLER and GigaMedia

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Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER 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 TRADEDOUBLER and GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and GigaMedia, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and GigaMedia.

Diversification Opportunities for TRADEDOUBLER and GigaMedia

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between TRADEDOUBLER and GigaMedia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and GigaMedia go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and GigaMedia

Assuming the 90 days horizon TRADEDOUBLER is expected to generate 7.25 times less return on investment than GigaMedia. In addition to that, TRADEDOUBLER is 2.16 times more volatile than GigaMedia. It trades about 0.01 of its total potential returns per unit of risk. GigaMedia is currently generating about 0.21 per unit of volatility. If you would invest  133.00  in GigaMedia on October 4, 2024 and sell it today you would earn a total of  7.00  from holding GigaMedia or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.74%
ValuesDaily Returns

TRADEDOUBLER AB SK  vs.  GigaMedia

 Performance 
       Timeline  
TRADEDOUBLER AB SK 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.
GigaMedia 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GigaMedia are ranked lower than 15 (%) 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.

TRADEDOUBLER and GigaMedia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TRADEDOUBLER and GigaMedia

The main advantage of trading using opposite TRADEDOUBLER and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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