Correlation Between Doubledown InteractiveCo and Giga Media

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

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

Diversification Opportunities for Doubledown InteractiveCo and Giga Media

-0.74

Correlation Coefficient

Doubledown InteractiveCo  Giga Media

Pay attention - limited upside

The 3 months correlation between Doubledown and Giga is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Doubledown InteractiveCo and Giga Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Media and Doubledown InteractiveCo 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 Doubledown InteractiveCo are associated (or correlated) with Giga Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Media has no effect on the direction of Doubledown InteractiveCo i.e., Doubledown InteractiveCo and Giga Media go up and down completely randomly.

Pair Corralation between Doubledown InteractiveCo and Giga Media

Considering the 90-day investment horizon Doubledown InteractiveCo is expected to under-perform the Giga Media. In addition to that, Doubledown InteractiveCo is 2.15 times more volatile than Giga Media. It trades about -0.18 of its total potential returns per unit of risk. Giga Media is currently generating about 0.03 per unit of volatility. If you would invest  130.00  in Giga Media on January 20, 2024 and sell it today you would earn a total of  1.00  from holding Giga Media or generate 0.77% return on investment over 90 days.

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

Doubledown InteractiveCo  vs.  Giga Media

Doubledown InteractiveCo

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Doubledown InteractiveCo are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Doubledown InteractiveCo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Giga Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Giga Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Doubledown InteractiveCo and Giga Media

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

The idea behind Doubledown InteractiveCo and Giga Media 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.