Correlation Between Gigas Hosting and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Gigas Hosting and Dow Jones 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 Gigas Hosting and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigas Hosting SA and Dow Jones Industrial, you can compare the effects of market volatilities on Gigas Hosting and Dow Jones 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 Gigas Hosting with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigas Hosting and Dow Jones.
Diversification Opportunities for Gigas Hosting and Dow Jones
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gigas and Dow is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Gigas Hosting 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 Gigas Hosting SA are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Dow Jones go up and down completely randomly.
Pair Corralation between Gigas Hosting and Dow Jones
Assuming the 90 days trading horizon Gigas Hosting SA is expected to under-perform the Dow Jones. In addition to that, Gigas Hosting is 1.78 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.38 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 311,605 from holding Dow Jones Industrial or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gigas Hosting SA vs. Dow Jones Industrial
Performance |
| Timeline |
Gigas Hosting and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Gigas Hosting SA
Pair trading matchups for Gigas Hosting
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Gigas Hosting and Dow Jones
The main advantage of trading using opposite Gigas Hosting and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigas Hosting position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Endurance Motive SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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