Correlation Between Gigas Hosting and Mapfre
Can any of the company-specific risk be diversified away by investing in both Gigas Hosting and Mapfre 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 Mapfre 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 Mapfre, you can compare the effects of market volatilities on Gigas Hosting and Mapfre 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 Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigas Hosting and Mapfre.
Diversification Opportunities for Gigas Hosting and Mapfre
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gigas and Mapfre is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre 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 Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Mapfre go up and down completely randomly.
Pair Corralation between Gigas Hosting and Mapfre
Assuming the 90 days trading horizon Gigas Hosting SA is expected to generate 1.79 times more return on investment than Mapfre. However, Gigas Hosting is 1.79 times more volatile than Mapfre. It trades about -0.06 of its potential returns per unit of risk. Mapfre is currently generating about -0.16 per unit of risk. If you would invest 800.00 in Gigas Hosting SA on September 3, 2024 and sell it today you would lose (20.00) from holding Gigas Hosting SA or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigas Hosting SA vs. Mapfre
Performance |
| Timeline |
| Gigas Hosting SA |
| Mapfre |
Gigas Hosting and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigas Hosting and Mapfre
The main advantage of trading using opposite Gigas Hosting and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigas Hosting position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Endurance Motive SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre |
| Mapfre vs. Caixabank SA | Mapfre vs. Atresmedia Corporacin de | Mapfre vs. Borges Agricultural Industrial | Mapfre vs. Bankinter |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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