Correlation Between Giga Media and SohuCom
Can any of the company-specific risk be diversified away by investing in both Giga Media and SohuCom 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 SohuCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giga Media and SohuCom, you can compare the effects of market volatilities on Giga Media and SohuCom 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 SohuCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Media and SohuCom.
Diversification Opportunities for Giga Media and SohuCom
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Giga and SohuCom is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Giga Media and SohuCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SohuCom 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 SohuCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SohuCom has no effect on the direction of Giga Media i.e., Giga Media and SohuCom go up and down completely randomly.
Pair Corralation between Giga Media and SohuCom
Given the investment horizon of 90 days Giga Media is expected to under-perform the SohuCom. But the stock apears to be less risky and, when comparing its historical volatility, Giga Media is 1.26 times less risky than SohuCom. The stock trades about -0.06 of its potential returns per unit of risk. The SohuCom is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,151 in SohuCom on May 2, 2025 and sell it today you would earn a total of 367.00 from holding SohuCom or generate 31.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giga Media vs. SohuCom
Performance |
| Timeline |
| Giga Media |
| SohuCom |
Giga Media and SohuCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giga Media and SohuCom
The main advantage of trading using opposite Giga Media and SohuCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Media position performs unexpectedly, SohuCom 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 SohuCom will offset losses from the drop in SohuCom's long position.| Giga Media vs. Doubledown Interactive Co | Giga Media vs. GameSquare Holdings | Giga Media vs. The9 Ltd ADR | Giga Media vs. Sonida Senior Living |
| SohuCom vs. Doubledown Interactive Co | SohuCom vs. Playtika Holding Corp | SohuCom vs. Gravity Co | SohuCom vs. NetEase |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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