Correlation Between Grenergy Renovables and Gigas Hosting

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

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

Diversification Opportunities for Grenergy Renovables and Gigas Hosting

-0.42

Correlation Coefficient

Grenergy Renovables  Gigas Hosting

Very good diversification

The 3 months correlation between Grenergy and Gigas is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Grenergy Renovables 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 Grenergy Renovables 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 Grenergy Renovables 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 Grenergy Renovables i.e., Grenergy Renovables and Gigas Hosting go up and down completely randomly.

Pair Corralation between Grenergy Renovables and Gigas Hosting

Assuming the 90 days trading horizon Grenergy Renovables SA is expected to under-perform the Gigas Hosting. In addition to that, Grenergy Renovables is 1.29 times more volatile than Gigas Hosting SA. It trades about -0.1 of its total potential returns per unit of risk. Gigas Hosting SA is currently generating about 0.11 per unit of volatility. If you would invest  670.00  in Gigas Hosting SA on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Gigas Hosting SA or generate 14.93% return on investment over 90 days.

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

Grenergy Renovables SA  vs.  Gigas Hosting SA

Grenergy Renovables

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grenergy Renovables SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Grenergy Renovables and Gigas Hosting

The main advantage of trading using opposite Grenergy Renovables and Gigas Hosting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grenergy Renovables 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 Grenergy Renovables 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.