Correlation Between Gigastorage Corp and Pontex Polyblend

Can any of the company-specific risk be diversified away by investing in both Gigastorage Corp and Pontex Polyblend 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 Gigastorage Corp and Pontex Polyblend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gigastorage Corp and Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Gigastorage Corp and Pontex Polyblend 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 Gigastorage Corp with a short position of Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gigastorage Corp and Pontex Polyblend.

Diversification Opportunities for Gigastorage Corp and Pontex Polyblend

-0.38

Correlation Coefficient

Gigastorage Corp  Pontex Polyblend

Very good diversification

The 3 months correlation between Gigastorage and Pontex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gigastorage Corp and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd and Gigastorage Corp 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 Gigastorage Corp are associated (or correlated) with Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Gigastorage Corp i.e., Gigastorage Corp and Pontex Polyblend go up and down completely randomly.

Pair Corralation between Gigastorage Corp and Pontex Polyblend

Assuming the 90 days trading horizon Gigastorage Corp is expected to under-perform the Pontex Polyblend. But the stock apears to be less risky and, when comparing its historical volatility, Gigastorage Corp is 1.22 times less risky than Pontex Polyblend. The stock trades about -0.02 of its potential returns per unit of risk. The Pontex Polyblend CoLtd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,223  in Pontex Polyblend CoLtd on October 22, 2024 and sell it today you would earn a total of  927.00  from holding Pontex Polyblend CoLtd or generate 75.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gigastorage Corp  vs.  Pontex Polyblend CoLtd

Gigastorage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gigastorage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pontex Polyblend CoLtd

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pontex Polyblend CoLtd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Pontex Polyblend showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gigastorage Corp and Pontex Polyblend

The main advantage of trading using opposite Gigastorage Corp and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gigastorage Corp position performs unexpectedly, Pontex Polyblend 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 Pontex Polyblend will offset losses from the drop in Pontex Polyblend's long position.

The idea behind Gigastorage Corp and Pontex Polyblend CoLtd 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.