Correlation Between HYBE and GiantStep

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

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

Diversification Opportunities for HYBE and GiantStep

-0.6

Correlation Coefficient

HYBE  GiantStep

Excellent diversification

The 3 months correlation between HYBE and GiantStep is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding HYBE Co and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep and HYBE 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 HYBE Co are associated (or correlated) with GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of HYBE i.e., HYBE and GiantStep go up and down completely randomly.

Pair Corralation between HYBE and GiantStep

Assuming the 90 days trading horizon HYBE is expected to generate 3.25 times less return on investment than GiantStep. But when comparing it to its historical volatility, HYBE Co is 2.18 times less risky than GiantStep. It trades about 0.11 of its potential returns per unit of risk. GiantStep Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  589,000  in GiantStep Co on October 12, 2024 and sell it today you would earn a total of  72,000  from holding GiantStep Co or generate 12.22% return on investment over 90 days.

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

HYBE Co  vs.  GiantStep Co

HYBE

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HYBE Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HYBE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GiantStep

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GiantStep Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HYBE and GiantStep

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

The idea behind HYBE Co and GiantStep Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.