Correlation Between Cemtrex and GigaCloud Technology

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

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

Diversification Opportunities for Cemtrex and GigaCloud Technology

-0.77

Correlation Coefficient

Cemtrex  GigaCloud Technology

Pay attention - limited upside

The 3 months correlation between Cemtrex and GigaCloud is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex and GigaCloud Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaCloud Technology and Cemtrex 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 Cemtrex 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 Cemtrex i.e., Cemtrex and GigaCloud Technology go up and down completely randomly.

Pair Corralation between Cemtrex and GigaCloud Technology

Given the investment horizon of 90 days Cemtrex is expected to under-perform the GigaCloud Technology. In addition to that, Cemtrex is 1.99 times more volatile than GigaCloud Technology Class. It trades about -0.33 of its total potential returns per unit of risk. GigaCloud Technology Class is currently generating about 0.05 per unit of volatility. If you would invest  2,426  in GigaCloud Technology Class on August 30, 2024 and sell it today you would earn a total of  52.00  from holding GigaCloud Technology Class or generate 2.14% return on investment over 90 days.

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

Cemtrex  vs.  GigaCloud Technology Class

Cemtrex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

GigaCloud Technology

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GigaCloud Technology Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, GigaCloud Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cemtrex and GigaCloud Technology

The main advantage of trading using opposite Cemtrex and GigaCloud Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtrex 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 Cemtrex 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.