Correlation Between Giga Media and Glu Mobile

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

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

Diversification Opportunities for Giga Media and Glu Mobile

0.0

Correlation Coefficient

Giga Media  Glu Mobile

Pay attention - limited upside

The 3 months correlation between Giga and Glu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Giga Media and Glu Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glu Mobile and Giga Media 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 Giga Media are associated (or correlated) with Glu Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glu Mobile has no effect on the direction of Giga Media i.e., Giga Media and Glu Mobile go up and down completely randomly.

Pair Corralation between Giga Media and Glu Mobile

If you would invest (100.00) in Glu Mobile on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Glu Mobile or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Giga Media  vs.  Glu Mobile

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 very healthy technical and fundamental indicators, Giga Media is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Glu Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glu Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Glu Mobile is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Giga Media and Glu Mobile

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

The idea behind Giga Media and Glu Mobile 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .