Correlation Between GigaCloud Technology and Robinhood Markets

Can any of the company-specific risk be diversified away by investing in both GigaCloud Technology and Robinhood Markets 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 Robinhood Markets 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 Robinhood Markets, you can compare the effects of market volatilities on GigaCloud Technology and Robinhood Markets 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 Robinhood Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaCloud Technology and Robinhood Markets.

Diversification Opportunities for GigaCloud Technology and Robinhood Markets

0.05

Correlation Coefficient

GigaCloud Technology  Robinhood Markets

Significant diversification

The 3 months correlation between GigaCloud and Robinhood is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Robinhood Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinhood Markets 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 Robinhood Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinhood Markets has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Robinhood Markets go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Robinhood Markets

Considering the 90-day investment horizon GigaCloud Technology Class is expected to generate 1.76 times more return on investment than Robinhood Markets. However, GigaCloud Technology is 1.76 times more volatile than Robinhood Markets. It trades about 0.07 of its potential returns per unit of risk. Robinhood Markets is currently generating about 0.11 per unit of risk. If you would invest  560.00  in GigaCloud Technology Class on September 19, 2024 and sell it today you would earn a total of  1,409  from holding GigaCloud Technology Class or generate 251.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GigaCloud Technology Class  vs.  Robinhood Markets

GigaCloud Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GigaCloud Technology Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, GigaCloud Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Robinhood Markets

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Robinhood Markets are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Robinhood Markets exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GigaCloud Technology and Robinhood Markets

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

The idea behind GigaCloud Technology Class and Robinhood Markets 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.