Correlation Between Boqii Holding and GigaCloud Technology
Can any of the company-specific risk be diversified away by investing in both Boqii Holding and GigaCloud Technology 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 Boqii Holding and GigaCloud Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boqii Holding Limited and GigaCloud Technology Class, you can compare the effects of market volatilities on Boqii Holding and GigaCloud Technology 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 Boqii Holding with a short position of GigaCloud Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boqii Holding and GigaCloud Technology.
Diversification Opportunities for Boqii Holding and GigaCloud Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boqii and GigaCloud is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boqii Holding Limited and GigaCloud Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaCloud Technology and Boqii Holding 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 Boqii Holding Limited are associated (or correlated) with GigaCloud Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaCloud Technology has no effect on the direction of Boqii Holding i.e., Boqii Holding and GigaCloud Technology go up and down completely randomly.
Pair Corralation between Boqii Holding and GigaCloud Technology
Allowing for the 90-day total investment horizon Boqii Holding Limited is expected to generate 0.7 times more return on investment than GigaCloud Technology. However, Boqii Holding Limited is 1.44 times less risky than GigaCloud Technology. It trades about 0.17 of its potential returns per unit of risk. GigaCloud Technology Class is currently generating about 0.07 per unit of risk. If you would invest 43.00 in Boqii Holding Limited on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Boqii Holding Limited or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boqii Holding Limited vs. GigaCloud Technology Class
Performance |
| Timeline |
| Boqii Holding Limited |
| GigaCloud Technology |
Boqii Holding and GigaCloud Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boqii Holding and GigaCloud Technology
The main advantage of trading using opposite Boqii Holding and GigaCloud Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boqii Holding position performs unexpectedly, GigaCloud Technology 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 GigaCloud Technology will offset losses from the drop in GigaCloud Technology's long position.| Boqii Holding vs. Card Factory plc | Boqii Holding vs. School Specialty | Boqii Holding vs. Ceconomy AG ADR | Boqii Holding vs. Bowlin Travel Centers |
| GigaCloud Technology vs. Steven Madden | GigaCloud Technology vs. Vera Bradley | GigaCloud Technology vs. Caleres | GigaCloud Technology vs. Rocky Brands |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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