Correlation Between Gigas Hosting and Agile Content

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

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

Diversification Opportunities for Gigas Hosting and Agile Content

0.17

Correlation Coefficient

Gigas Hosting  Agile Content

Average diversification

The 3 months correlation between Gigas and Agile is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gigas Hosting SA and Agile Content SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Content SA and Gigas Hosting 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 Gigas Hosting SA are associated (or correlated) with Agile Content. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Content SA has no effect on the direction of Gigas Hosting i.e., Gigas Hosting and Agile Content go up and down completely randomly.

Pair Corralation between Gigas Hosting and Agile Content

Assuming the 90 days trading horizon Gigas Hosting SA is expected to generate 0.89 times more return on investment than Agile Content. However, Gigas Hosting SA is 1.13 times less risky than Agile Content. It trades about 0.1 of its potential returns per unit of risk. Agile Content SA is currently generating about -0.03 per unit of risk. 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

Gigas Hosting SA  vs.  Agile Content SA

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.

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.

Pair Trading with Gigas Hosting and Agile Content

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

The idea behind Gigas Hosting SA and Agile Content 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.