Correlation Between Tainet Communication and Gigastone

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

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

Diversification Opportunities for Tainet Communication and Gigastone

0.0

Correlation Coefficient

Tainet Communication  Gigastone

Pay attention - limited upside

The 3 months correlation between Tainet and Gigastone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tainet Communication System and Gigastone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastone and Tainet Communication 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 Tainet Communication System are associated (or correlated) with Gigastone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastone has no effect on the direction of Tainet Communication i.e., Tainet Communication and Gigastone go up and down completely randomly.

Pair Corralation between Tainet Communication and Gigastone

If you would invest (100.00) in Gigastone on March 11, 2024 and sell it today you would earn a total of  100.00  from holding Gigastone or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tainet Communication System  vs.  Gigastone

Tainet Communication

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tainet Communication System are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tainet Communication showed solid returns over the last few months and may actually be approaching a breakup point.

Gigastone

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gigastone has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gigastone is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tainet Communication and Gigastone

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

The idea behind Tainet Communication System and Gigastone 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.