Correlation Between GigaCloud Technology and Ironnet

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

Diversification Opportunities for GigaCloud Technology and Ironnet

-0.79

Correlation Coefficient

GigaCloud Technology  Ironnet

Pay attention - limited upside

The 3 months correlation between GigaCloud and Ironnet is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Ironnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironnet 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 Ironnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironnet has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Ironnet go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Ironnet

If you would invest  1,944  in GigaCloud Technology Class on August 30, 2024 and sell it today you would earn a total of  534.00  from holding GigaCloud Technology Class or generate 27.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

GigaCloud Technology Class  vs.  Ironnet

GigaCloud Technology

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GigaCloud Technology Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, GigaCloud Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ironnet

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GigaCloud Technology and Ironnet

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

The idea behind GigaCloud Technology Class and Ironnet 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.