Correlation Between Giga Tronics and IQ Healthy

Can any of the company-specific risk be diversified away by investing in both Giga Tronics and IQ Healthy 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 Giga Tronics and IQ Healthy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Giga tronics and IQ Healthy Hearts, you can compare the effects of market volatilities on Giga Tronics and IQ Healthy 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 Giga Tronics with a short position of IQ Healthy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Tronics and IQ Healthy.

Diversification Opportunities for Giga Tronics and IQ Healthy

0.69

Correlation Coefficient

Giga Tronics  IQ Healthy

Poor diversification

The 3 months correlation between Giga and HART is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Giga tronics and IQ Healthy Hearts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Healthy Hearts and Giga Tronics 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 Giga tronics are associated (or correlated) with IQ Healthy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Healthy Hearts has no effect on the direction of Giga Tronics i.e., Giga Tronics and IQ Healthy go up and down completely randomly.

Pair Corralation between Giga Tronics and IQ Healthy

Given the investment horizon of 90 days Giga tronics is expected to generate 39.92 times more return on investment than IQ Healthy. However, Giga Tronics is 39.92 times more volatile than IQ Healthy Hearts. It trades about 0.01 of its potential returns per unit of risk. IQ Healthy Hearts is currently generating about -0.09 per unit of risk. If you would invest  5.00  in Giga tronics on September 4, 2024 and sell it today you would lose (4.22) from holding Giga tronics or give up 84.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Giga tronics  vs.  IQ Healthy Hearts

Giga tronics

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Giga tronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Giga Tronics sustained solid returns over the last few months and may actually be approaching a breakup point.

IQ Healthy Hearts

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Giga Tronics and IQ Healthy

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

The idea behind Giga tronics and IQ Healthy Hearts 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.