Correlation Between Saia and GigCapital5
Can any of the company-specific risk be diversified away by investing in both Saia and GigCapital5 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 Saia and GigCapital5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and GigCapital5, you can compare the effects of market volatilities on Saia and GigCapital5 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 Saia with a short position of GigCapital5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and GigCapital5.
Diversification Opportunities for Saia and GigCapital5
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saia and GigCapital5 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and GigCapital5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigCapital5 and Saia 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 Saia Inc are associated (or correlated) with GigCapital5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigCapital5 has no effect on the direction of Saia i.e., Saia and GigCapital5 go up and down completely randomly.
Pair Corralation between Saia and GigCapital5
Given the investment horizon of 90 days Saia is expected to generate 6.97 times less return on investment than GigCapital5. But when comparing it to its historical volatility, Saia Inc is 5.3 times less risky than GigCapital5. It trades about 0.07 of its potential returns per unit of risk. GigCapital5 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.10 in GigCapital5 on September 2, 2024 and sell it today you would earn a total of 0.05 from holding GigCapital5 or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.69% |
| Values | Daily Returns |
Saia Inc vs. GigCapital5
Performance |
| Timeline |
| Saia Inc |
| GigCapital5 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Saia and GigCapital5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and GigCapital5
The main advantage of trading using opposite Saia and GigCapital5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia position performs unexpectedly, GigCapital5 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 GigCapital5 will offset losses from the drop in GigCapital5's long position.The idea behind Saia Inc and GigCapital5 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GigCapital5 vs. Willamette Valley Vineyards | GigCapital5 vs. Scandinavian Tobacco Group | GigCapital5 vs. Turning Point Brands | GigCapital5 vs. Constellation Brands Class |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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