Correlation Between Agile Content and Gigas Hosting

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

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

Diversification Opportunities for Agile Content and Gigas Hosting

0.17

Correlation Coefficient

Agile Content  Gigas Hosting

Average diversification

The 3 months correlation between Agile and Gigas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Agile Content SA 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 Agile Content 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 Agile Content SA 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 Agile Content i.e., Agile Content and Gigas Hosting go up and down completely randomly.

Pair Corralation between Agile Content and Gigas Hosting

Assuming the 90 days trading horizon Agile Content SA is expected to under-perform the Gigas Hosting. In addition to that, Agile Content is 1.13 times more volatile than Gigas Hosting SA. It trades about -0.03 of its total potential returns per unit of risk. Gigas Hosting SA is currently generating about 0.1 per unit of volatility. If you would invest  705.00  in Gigas Hosting SA on September 5, 2024 and sell it today you would earn a total of  95.00  from holding Gigas Hosting SA or generate 13.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Agile Content SA  vs.  Gigas Hosting SA

Agile Content SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Agile Content is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gigas Hosting SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gigas Hosting SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Gigas Hosting exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agile Content and Gigas Hosting

The main advantage of trading using opposite Agile Content and Gigas Hosting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agile Content 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.

The idea behind Agile Content SA and Gigas Hosting SA 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.