Correlation Between Gaia and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Gaia and Reservoir 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 Gaia and Reservoir Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaia Inc and Reservoir Media, you can compare the effects of market volatilities on Gaia and Reservoir 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 Gaia with a short position of Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaia and Reservoir Media.
Diversification Opportunities for Gaia and Reservoir Media
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaia and Reservoir is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gaia Inc and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media and Gaia 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 Gaia Inc are associated (or correlated) with Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Gaia i.e., Gaia and Reservoir Media go up and down completely randomly.
Pair Corralation between Gaia and Reservoir Media
Given the investment horizon of 90 days Gaia Inc is expected to generate 1.25 times more return on investment than Reservoir Media. However, Gaia is 1.25 times more volatile than Reservoir Media. It trades about 0.1 of its potential returns per unit of risk. Reservoir Media is currently generating about 0.06 per unit of risk. If you would invest 452.00 in Gaia Inc on August 24, 2024 and sell it today you would earn a total of 181.00 from holding Gaia Inc or generate 40.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaia Inc vs. Reservoir Media
Performance |
| Timeline |
| Gaia Inc |
| Reservoir Media |
Gaia and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaia and Reservoir Media
The main advantage of trading using opposite Gaia and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaia position performs unexpectedly, Reservoir 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 Reservoir Media will offset losses from the drop in Reservoir Media's long position.| Gaia vs. Roku Inc | Gaia vs. AMC Entertainment Holdings | Gaia vs. Paramount Global Class | Gaia vs. Warner Bros Discovery |
| Reservoir Media vs. Roku Inc | Reservoir Media vs. AMC Entertainment Holdings | Reservoir Media vs. Paramount Global Class | Reservoir Media vs. Warner Bros Discovery |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |