Correlation Between Vytrus Biotech and Gigas Hosting

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

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

Diversification Opportunities for Vytrus Biotech and Gigas Hosting

-0.1

Correlation Coefficient

Vytrus Biotech  Gigas Hosting

Good diversification

The 3 months correlation between Vytrus and Gigas is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vytrus Biotech SA and Gigas Hosting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigas Hosting SA and Vytrus Biotech 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 Vytrus Biotech SA are associated (or correlated) with Gigas Hosting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigas Hosting SA has no effect on the direction of Vytrus Biotech i.e., Vytrus Biotech and Gigas Hosting go up and down completely randomly.

Pair Corralation between Vytrus Biotech and Gigas Hosting

Assuming the 90 days trading horizon Vytrus Biotech SA is expected to generate 3.09 times more return on investment than Gigas Hosting. However, Vytrus Biotech is 3.09 times more volatile than Gigas Hosting SA. It trades about 0.01 of its potential returns per unit of risk. Gigas Hosting SA is currently generating about -0.03 per unit of risk. If you would invest  340.00  in Vytrus Biotech SA on October 10, 2024 and sell it today you would lose (124.00) from holding Vytrus Biotech SA or give up 36.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.22%
Values	Daily Returns

Vytrus Biotech SA  vs.  Gigas Hosting SA

Vytrus Biotech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vytrus Biotech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vytrus Biotech is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gigas Hosting SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gigas Hosting SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Vytrus Biotech and Gigas Hosting

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

The idea behind Vytrus Biotech SA and Gigas Hosting 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.