Correlation Between Gigastorage Corp and K Way
Can any of the company-specific risk be diversified away by investing in both Gigastorage Corp and K Way 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 Gigastorage Corp and K Way into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigastorage Corp and K Way Information, you can compare the effects of market volatilities on Gigastorage Corp and K Way 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 Gigastorage Corp with a short position of K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigastorage Corp and K Way.
Diversification Opportunities for Gigastorage Corp and K Way
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gigastorage and 5201 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gigastorage Corp and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information and Gigastorage Corp 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 Gigastorage Corp are associated (or correlated) with K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Gigastorage Corp i.e., Gigastorage Corp and K Way go up and down completely randomly.
Pair Corralation between Gigastorage Corp and K Way
Assuming the 90 days trading horizon Gigastorage Corp is expected to under-perform the K Way. In addition to that, Gigastorage Corp is 1.54 times more volatile than K Way Information. It trades about -0.18 of its total potential returns per unit of risk. K Way Information is currently generating about -0.03 per unit of volatility. If you would invest 2,740 in K Way Information on September 5, 2024 and sell it today you would lose (25.00) from holding K Way Information or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigastorage Corp vs. K Way Information
Performance |
| Timeline |
| Gigastorage Corp |
| K Way Information |
Gigastorage Corp and K Way Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigastorage Corp and K Way
The main advantage of trading using opposite Gigastorage Corp and K Way positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigastorage Corp position performs unexpectedly, K Way 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 K Way will offset losses from the drop in K Way's long position.| Gigastorage Corp vs. Taiwan Semiconductor Manufacturing | Gigastorage Corp vs. Yang Ming Marine | Gigastorage Corp vs. AU Optronics | Gigastorage Corp vs. Nan Ya Plastics |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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