Correlation Between GigaCloud Technology and Dropbox
Can any of the company-specific risk be diversified away by investing in both GigaCloud Technology and Dropbox 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 Dropbox 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 Dropbox, you can compare the effects of market volatilities on GigaCloud Technology and Dropbox 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 Dropbox. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaCloud Technology and Dropbox.
Diversification Opportunities for GigaCloud Technology and Dropbox
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GigaCloud and Dropbox is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Dropbox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dropbox 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 Dropbox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dropbox has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Dropbox go up and down completely randomly.
Pair Corralation between GigaCloud Technology and Dropbox
Considering the 90-day investment horizon GigaCloud Technology is expected to generate 1.55 times less return on investment than Dropbox. In addition to that, GigaCloud Technology is 3.39 times more volatile than Dropbox. It trades about 0.04 of its total potential returns per unit of risk. Dropbox is currently generating about 0.23 per unit of volatility. If you would invest 2,582 in Dropbox on August 30, 2024 and sell it today you would earn a total of 255.00 from holding Dropbox or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaCloud Technology Class vs. Dropbox
Performance |
| Timeline |
| GigaCloud Technology |
| Dropbox |
GigaCloud Technology and Dropbox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaCloud Technology and Dropbox
The main advantage of trading using opposite GigaCloud Technology and Dropbox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaCloud Technology position performs unexpectedly, Dropbox 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 Dropbox will offset losses from the drop in Dropbox's long position.| GigaCloud Technology vs. Arqit Quantum | GigaCloud Technology vs. Telos Corp | GigaCloud Technology vs. Cemtrex | GigaCloud Technology vs. Alarum Technologies |
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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