Correlation Between GigaCloud Technology and Confluent
Can any of the company-specific risk be diversified away by investing in both GigaCloud Technology and Confluent 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 GigaCloud Technology and Confluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GigaCloud Technology Class and Confluent, you can compare the effects of market volatilities on GigaCloud Technology and Confluent 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 GigaCloud Technology with a short position of Confluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaCloud Technology and Confluent.
Diversification Opportunities for GigaCloud Technology and Confluent
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GigaCloud and Confluent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent and GigaCloud Technology 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 GigaCloud Technology Class are associated (or correlated) with Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Confluent go up and down completely randomly.
Pair Corralation between GigaCloud Technology and Confluent
Considering the 90-day investment horizon GigaCloud Technology Class is expected to under-perform the Confluent. In addition to that, GigaCloud Technology is 1.4 times more volatile than Confluent. It trades about -0.02 of its total potential returns per unit of risk. Confluent is currently generating about 0.06 per unit of volatility. If you would invest 2,582 in Confluent on September 1, 2024 and sell it today you would earn a total of 502.00 from holding Confluent or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaCloud Technology Class vs. Confluent
Performance |
| Timeline |
| GigaCloud Technology |
| Confluent |
GigaCloud Technology and Confluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaCloud Technology and Confluent
The main advantage of trading using opposite GigaCloud Technology and Confluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaCloud Technology position performs unexpectedly, Confluent 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 Confluent will offset losses from the drop in Confluent's long position.| GigaCloud Technology vs. Steven Madden | GigaCloud Technology vs. Vera Bradley | GigaCloud Technology vs. Caleres | GigaCloud Technology vs. Wolverine World Wide |
| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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