Correlation Between Gigabyte Technology and Holy Stone
Can any of the company-specific risk be diversified away by investing in both Gigabyte Technology and Holy Stone 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 Gigabyte Technology and Holy Stone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gigabyte Technology Co and Holy Stone Enterprise, you can compare the effects of market volatilities on Gigabyte Technology and Holy Stone 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 Gigabyte Technology with a short position of Holy Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigabyte Technology and Holy Stone.
Diversification Opportunities for Gigabyte Technology and Holy Stone
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gigabyte and Holy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gigabyte Technology Co and Holy Stone Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holy Stone Enterprise and Gigabyte Technology 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 Gigabyte Technology Co are associated (or correlated) with Holy Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holy Stone Enterprise has no effect on the direction of Gigabyte Technology i.e., Gigabyte Technology and Holy Stone go up and down completely randomly.
Pair Corralation between Gigabyte Technology and Holy Stone
Assuming the 90 days trading horizon Gigabyte Technology Co is expected to generate 2.28 times more return on investment than Holy Stone. However, Gigabyte Technology is 2.28 times more volatile than Holy Stone Enterprise. It trades about 0.09 of its potential returns per unit of risk. Holy Stone Enterprise is currently generating about -0.23 per unit of risk. If you would invest 27,750 in Gigabyte Technology Co on October 9, 2024 and sell it today you would earn a total of 850.00 from holding Gigabyte Technology Co or generate 3.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gigabyte Technology Co vs. Holy Stone Enterprise
Performance |
Timeline |
Gigabyte Technology |
Holy Stone Enterprise |
Gigabyte Technology and Holy Stone Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gigabyte Technology and Holy Stone
The main advantage of trading using opposite Gigabyte Technology and Holy Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigabyte Technology position performs unexpectedly, Holy Stone 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 Holy Stone will offset losses from the drop in Holy Stone's long position.Gigabyte Technology vs. Micro Star International Co | Gigabyte Technology vs. Asustek Computer | Gigabyte Technology vs. Quanta Computer | Gigabyte Technology vs. Compal Electronics |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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