Correlation Between GigaCloud Technology and MicroAlgo
Can any of the company-specific risk be diversified away by investing in both GigaCloud Technology and MicroAlgo 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 MicroAlgo 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 MicroAlgo, you can compare the effects of market volatilities on GigaCloud Technology and MicroAlgo 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 MicroAlgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaCloud Technology and MicroAlgo.
Diversification Opportunities for GigaCloud Technology and MicroAlgo
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GigaCloud and MicroAlgo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and MicroAlgo go up and down completely randomly.
Pair Corralation between GigaCloud Technology and MicroAlgo
Considering the 90-day investment horizon GigaCloud Technology Class is expected to under-perform the MicroAlgo. But the stock apears to be less risky and, when comparing its historical volatility, GigaCloud Technology Class is 13.4 times less risky than MicroAlgo. The stock trades about -0.02 of its potential returns per unit of risk. The MicroAlgo is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 156.00 in MicroAlgo on August 31, 2024 and sell it today you would lose (139.00) from holding MicroAlgo or give up 89.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GigaCloud Technology Class vs. MicroAlgo
Performance |
| Timeline |
| GigaCloud Technology |
| MicroAlgo |
GigaCloud Technology and MicroAlgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GigaCloud Technology and MicroAlgo
The main advantage of trading using opposite GigaCloud Technology and MicroAlgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaCloud Technology position performs unexpectedly, MicroAlgo 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 MicroAlgo will offset losses from the drop in MicroAlgo's long position.| GigaCloud Technology vs. Arqit Quantum | GigaCloud Technology vs. Telos Corp | GigaCloud Technology vs. Cemtrex | GigaCloud Technology vs. Alarum Technologies |
| MicroAlgo vs. NetScout Systems | MicroAlgo vs. Consensus Cloud Solutions | MicroAlgo vs. CSG Systems International | MicroAlgo vs. Evertec |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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