Correlation Between GigaCloud Technology and Crowdstrike Holdings

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

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

Diversification Opportunities for GigaCloud Technology and Crowdstrike Holdings

0.1

Correlation Coefficient

GigaCloud Technology  Crowdstrike Holdings

Average diversification

The 3 months correlation between GigaCloud and Crowdstrike is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings and GigaCloud 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 GigaCloud Technology Class are associated (or correlated) with Crowdstrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crowdstrike Holdings has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Crowdstrike Holdings go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Crowdstrike Holdings

Considering the 90-day investment horizon GigaCloud Technology Class is expected to under-perform the Crowdstrike Holdings. In addition to that, GigaCloud Technology is 1.46 times more volatile than Crowdstrike Holdings. It trades about -0.31 of its total potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.13 per unit of volatility. If you would invest  35,329  in Crowdstrike Holdings on September 20, 2024 and sell it today you would earn a total of  2,313  from holding Crowdstrike Holdings or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

GigaCloud Technology Class  vs.  Crowdstrike Holdings

GigaCloud Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GigaCloud Technology Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, GigaCloud Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Crowdstrike Holdings

Risk-Adjusted Performance

8 of 100

Good

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

Pair Trading with GigaCloud Technology and Crowdstrike Holdings

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

The idea behind GigaCloud Technology Class and Crowdstrike Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.