Correlation Between Giga Media and Blue Hat

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

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

Diversification Opportunities for Giga Media and Blue Hat

-0.4

Correlation Coefficient

Giga Media  Blue Hat

Very good diversification

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

Pair Corralation between Giga Media and Blue Hat

Given the investment horizon of 90 days Giga Media is expected to generate 0.38 times more return on investment than Blue Hat. However, Giga Media is 2.6 times less risky than Blue Hat. It trades about 0.14 of its potential returns per unit of risk. Blue Hat Interactive is currently generating about -0.02 per unit of risk. If you would invest  130.00  in Giga Media on January 25, 2024 and sell it today you would earn a total of  7.00  from holding Giga Media or generate 5.38% return on investment over 90 days.

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

Giga Media  vs.  Blue Hat Interactive

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.

Blue Hat Interactive

Risk-Adjusted Performance

2 of 100

Weak

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.

Pair Trading with Giga Media and Blue Hat

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

The idea behind Giga Media and Blue Hat Interactive 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.