Correlation Between Blue Hat and Giga Media

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

By analyzing existing cross correlation between Blue Hat Interactive and Giga Media, you can compare the effects of market volatilities on Blue Hat and Giga Media 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 Blue Hat with a short position of Giga Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Hat and Giga Media.

Diversification Opportunities for Blue Hat and Giga Media

-0.4

Correlation Coefficient

Blue Hat  Giga Media

Very good diversification

The 3 months correlation between Blue and Giga is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blue Hat Interactive and Giga Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Media and Blue Hat 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 Blue Hat Interactive are associated (or correlated) with Giga Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Media has no effect on the direction of Blue Hat i.e., Blue Hat and Giga Media go up and down completely randomly.

Pair Corralation between Blue Hat and Giga Media

Given the investment horizon of 90 days Blue Hat Interactive is expected to generate 2.16 times more return on investment than Giga Media. However, Blue Hat is 2.16 times more volatile than Giga Media. It trades about 0.03 of its potential returns per unit of risk. Giga Media is currently generating about -0.02 per unit of risk. If you would invest  107.00  in Blue Hat Interactive on January 26, 2024 and sell it today you would earn a total of  4.00  from holding Blue Hat Interactive or generate 3.74% return on investment over 90 days.

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

Blue Hat Interactive  vs.  Giga Media

Blue Hat Interactive

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Hat Interactive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Blue Hat may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Giga Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Giga Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Giga Media is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blue Hat and Giga Media

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

The idea behind Blue Hat Interactive and Giga Media 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.