Correlation Between Tait Marketing and Gigasolar Materials

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

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

Diversification Opportunities for Tait Marketing and Gigasolar Materials

-0.66

Correlation Coefficient

Tait Marketing  Gigasolar Materials

Excellent diversification

The 3 months correlation between Tait and Gigasolar is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and Gigasolar Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigasolar Materials and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with Gigasolar Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigasolar Materials has no effect on the direction of Tait Marketing i.e., Tait Marketing and Gigasolar Materials go up and down completely randomly.

Pair Corralation between Tait Marketing and Gigasolar Materials

Assuming the 90 days trading horizon Tait Marketing Distribution is expected to generate 0.28 times more return on investment than Gigasolar Materials. However, Tait Marketing Distribution is 3.52 times less risky than Gigasolar Materials. It trades about 0.06 of its potential returns per unit of risk. Gigasolar Materials is currently generating about -0.29 per unit of risk. If you would invest  4,000  in Tait Marketing Distribution on October 26, 2024 and sell it today you would earn a total of  30.00  from holding Tait Marketing Distribution or generate 0.75% return on investment over 90 days.

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

Tait Marketing Distribution  vs.  Gigasolar Materials

Tait Marketing Distr

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tait Marketing Distribution are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tait Marketing is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gigasolar Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gigasolar Materials 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.

Pair Trading with Tait Marketing and Gigasolar Materials

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

The idea behind Tait Marketing Distribution and Gigasolar Materials 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.