Correlation Between Gigas Hosting and Elecnor SA
Can any of the company-specific risk be diversified away by investing in both Gigas Hosting and Elecnor SA 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 Elecnor SA 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 Elecnor SA, you can compare the effects of market volatilities on Gigas Hosting and Elecnor SA 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 Elecnor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigas Hosting and Elecnor SA.
Diversification Opportunities for Gigas Hosting and Elecnor SA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gigas and Elecnor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Elecnor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecnor SA 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 Elecnor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecnor SA has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Elecnor SA go up and down completely randomly.
Pair Corralation between Gigas Hosting and Elecnor SA
Assuming the 90 days trading horizon Gigas Hosting SA is expected to under-perform the Elecnor SA. In addition to that, Gigas Hosting is 1.42 times more volatile than Elecnor SA. It trades about -0.02 of its total potential returns per unit of risk. Elecnor SA is currently generating about 0.11 per unit of volatility. If you would invest 1,015 in Elecnor SA on September 3, 2024 and sell it today you would earn a total of 1,020 from holding Elecnor SA or generate 100.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigas Hosting SA vs. Elecnor SA
Performance |
| Timeline |
| Gigas Hosting SA |
| Elecnor SA |
Gigas Hosting and Elecnor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigas Hosting and Elecnor SA
The main advantage of trading using opposite Gigas Hosting and Elecnor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigas Hosting position performs unexpectedly, Elecnor SA 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 Elecnor SA will offset losses from the drop in Elecnor SA's long position.| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Endurance Motive SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre |
| Elecnor SA vs. Miquel y Costas | Elecnor SA vs. Construcciones y Auxiliar | Elecnor SA vs. Grupo Catalana Occidente | Elecnor SA vs. Tecnicas Reunidas |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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