Correlation Between Hub Cyber and GigaCloud Technology

Can any of the company-specific risk be diversified away by investing in both Hub Cyber and GigaCloud Technology 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 Hub Cyber and GigaCloud Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hub Cyber Security and GigaCloud Technology Class, you can compare the effects of market volatilities on Hub Cyber and GigaCloud Technology 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 Hub Cyber with a short position of GigaCloud Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub Cyber and GigaCloud Technology.

Diversification Opportunities for Hub Cyber and GigaCloud Technology

0.15

Correlation Coefficient

Hub Cyber  GigaCloud Technology

Average diversification

The 3 months correlation between Hub and GigaCloud is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hub Cyber Security and GigaCloud Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaCloud Technology and Hub Cyber 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 Hub Cyber Security are associated (or correlated) with GigaCloud Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaCloud Technology has no effect on the direction of Hub Cyber i.e., Hub Cyber and GigaCloud Technology go up and down completely randomly.

Pair Corralation between Hub Cyber and GigaCloud Technology

Assuming the 90 days horizon Hub Cyber Security is expected to generate 7.4 times more return on investment than GigaCloud Technology. However, Hub Cyber is 7.4 times more volatile than GigaCloud Technology Class. It trades about 0.1 of its potential returns per unit of risk. GigaCloud Technology Class is currently generating about -0.04 per unit of risk. If you would invest  3.55  in Hub Cyber Security on December 30, 2024 and sell it today you would lose (1.19) from holding Hub Cyber Security or give up 33.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.32%
Values	Daily Returns

Hub Cyber Security  vs.  GigaCloud Technology Class

Hub Cyber Security

Risk-Adjusted Performance

OK

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

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.

Pair Trading with Hub Cyber and GigaCloud Technology

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

The idea behind Hub Cyber Security and GigaCloud Technology Class 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.