Correlation Between GigaCloud Technology and Nutanix

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

Diversification Opportunities for GigaCloud Technology and Nutanix

-0.34

Correlation Coefficient

GigaCloud Technology  Nutanix

Very good diversification

The 3 months correlation between GigaCloud and Nutanix is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix 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 Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of GigaCloud Technology i.e., GigaCloud Technology and Nutanix go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Nutanix

Considering the 90-day investment horizon GigaCloud Technology Class is expected to under-perform the Nutanix. In addition to that, GigaCloud Technology is 1.33 times more volatile than Nutanix. It trades about -0.04 of its total potential returns per unit of risk. Nutanix is currently generating about 0.09 per unit of volatility. If you would invest  6,157  in Nutanix on December 30, 2024 and sell it today you would earn a total of  945.00  from holding Nutanix or generate 15.35% return on investment over 90 days.

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

GigaCloud Technology Class  vs.  Nutanix

GigaCloud Technology

Risk-Adjusted Performance

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 latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nutanix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nutanix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GigaCloud Technology and Nutanix

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

The idea behind GigaCloud Technology Class and Nutanix 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.