Correlation Between Home Capital and Gigas Hosting
Can any of the company-specific risk be diversified away by investing in both Home Capital and Gigas Hosting 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 Home Capital and Gigas Hosting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Capital Rentals and Gigas Hosting SA, you can compare the effects of market volatilities on Home Capital and Gigas Hosting 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 Home Capital with a short position of Gigas Hosting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Capital and Gigas Hosting.
Diversification Opportunities for Home Capital and Gigas Hosting
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and Gigas is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Home Capital Rentals and Gigas Hosting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigas Hosting SA and Home Capital 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 Home Capital Rentals are associated (or correlated) with Gigas Hosting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigas Hosting SA has no effect on the direction of Home Capital i.e., Home Capital and Gigas Hosting go up and down completely randomly.
Pair Corralation between Home Capital and Gigas Hosting
Assuming the 90 days trading horizon Home Capital Rentals is expected to generate 0.56 times more return on investment than Gigas Hosting. However, Home Capital Rentals is 1.79 times less risky than Gigas Hosting. It trades about -0.16 of its potential returns per unit of risk. Gigas Hosting SA is currently generating about -0.29 per unit of risk. If you would invest 715.00 in Home Capital Rentals on November 3, 2024 and sell it today you would lose (55.00) from holding Home Capital Rentals or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.62% |
| Values | Daily Returns |
Home Capital Rentals vs. Gigas Hosting SA
Performance |
| Timeline |
| Home Capital Rentals |
| Gigas Hosting SA |
Home Capital and Gigas Hosting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Capital and Gigas Hosting
The main advantage of trading using opposite Home Capital and Gigas Hosting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Capital position performs unexpectedly, Gigas Hosting 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 Gigas Hosting will offset losses from the drop in Gigas Hosting's long position.| Home Capital vs. Arteche Lantegi Elkartea | Home Capital vs. International Consolidated Airlines | Home Capital vs. Arrienda Rental Properties | Home Capital vs. Media Investment Optimization |
| Gigas Hosting vs. Atrys Health SL | Gigas Hosting vs. Plasticos Compuestos SA | Gigas Hosting vs. Arrienda Rental Properties | Gigas Hosting vs. Tier1 Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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