Correlation Between Gigas Hosting and Tier1 Technology
Can any of the company-specific risk be diversified away by investing in both Gigas Hosting and Tier1 Technology 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 Tier1 Technology 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 Tier1 Technology SA, you can compare the effects of market volatilities on Gigas Hosting and Tier1 Technology 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 Tier1 Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigas Hosting and Tier1 Technology.
Diversification Opportunities for Gigas Hosting and Tier1 Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gigas and Tier1 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Tier1 Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tier1 Technology 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 Tier1 Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tier1 Technology has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Tier1 Technology go up and down completely randomly.
Pair Corralation between Gigas Hosting and Tier1 Technology
Assuming the 90 days trading horizon Gigas Hosting is expected to generate 6.78 times less return on investment than Tier1 Technology. But when comparing it to its historical volatility, Gigas Hosting SA is 1.19 times less risky than Tier1 Technology. It trades about 0.04 of its potential returns per unit of risk. Tier1 Technology SA is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Tier1 Technology SA on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Tier1 Technology SA or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gigas Hosting SA vs. Tier1 Technology SA
Performance |
| Timeline |
| Gigas Hosting SA |
| Tier1 Technology |
Gigas Hosting and Tier1 Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gigas Hosting and Tier1 Technology
The main advantage of trading using opposite Gigas Hosting and Tier1 Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigas Hosting position performs unexpectedly, Tier1 Technology 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 Tier1 Technology will offset losses from the drop in Tier1 Technology's long position.| Gigas Hosting vs. Metrovacesa SA | Gigas Hosting vs. Elecnor SA | Gigas Hosting vs. Mapfre | Gigas Hosting vs. Tander Inversiones SOCIMI |
| Tier1 Technology vs. Energy Solar Tech | Tier1 Technology vs. Inhome Prime Properties | Tier1 Technology vs. NH Hoteles | Tier1 Technology vs. Caixabank SA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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