Correlation Between Gigas Hosting and Metrovacesa
Can any of the company-specific risk be diversified away by investing in both Gigas Hosting and Metrovacesa 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 Metrovacesa 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 Metrovacesa SA, you can compare the effects of market volatilities on Gigas Hosting and Metrovacesa 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 Metrovacesa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigas Hosting and Metrovacesa.
Diversification Opportunities for Gigas Hosting and Metrovacesa
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gigas and Metrovacesa is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Metrovacesa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrovacesa 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 Metrovacesa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrovacesa SA has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Metrovacesa go up and down completely randomly.
Pair Corralation between Gigas Hosting and Metrovacesa
Assuming the 90 days trading horizon Gigas Hosting SA is expected to under-perform the Metrovacesa. In addition to that, Gigas Hosting is 1.5 times more volatile than Metrovacesa SA. It trades about -0.02 of its total potential returns per unit of risk. Metrovacesa SA is currently generating about 0.07 per unit of volatility. If you would invest 577.00 in Metrovacesa SA on September 3, 2024 and sell it today you would earn a total of 296.00 from holding Metrovacesa SA or generate 51.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigas Hosting SA vs. Metrovacesa SA
Performance |
| Timeline |
| Gigas Hosting SA |
| Metrovacesa SA |
Gigas Hosting and Metrovacesa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigas Hosting and Metrovacesa
The main advantage of trading using opposite Gigas Hosting and Metrovacesa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigas Hosting position performs unexpectedly, Metrovacesa 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 Metrovacesa will offset losses from the drop in Metrovacesa's long position.| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Endurance Motive SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre |
| Metrovacesa vs. Neinor Homes SLU | Metrovacesa vs. Merlin Properties SOCIMI | Metrovacesa vs. Atresmedia Corporacin de |
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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