Correlation Between Skillz Platform and Giga Media

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Can any of the company-specific risk be diversified away by investing in both Skillz Platform 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 Skillz Platform and Giga Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skillz Platform and Giga Media, you can compare the effects of market volatilities on Skillz Platform 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 Skillz Platform with a short position of Giga Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skillz Platform and Giga Media.

Diversification Opportunities for Skillz Platform and Giga Media

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Skillz and Giga is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Skillz Platform and Giga Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Media and Skillz Platform 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 Skillz Platform 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 Skillz Platform i.e., Skillz Platform and Giga Media go up and down completely randomly.

Pair Corralation between Skillz Platform and Giga Media

Given the investment horizon of 90 days Skillz Platform is expected to under-perform the Giga Media. In addition to that, Skillz Platform is 1.22 times more volatile than Giga Media. It trades about -0.21 of its total potential returns per unit of risk. Giga Media is currently generating about 0.12 per unit of volatility. If you would invest  129.00  in Giga Media on January 29, 2024 and sell it today you would earn a total of  6.00  from holding Giga Media or generate 4.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Skillz Platform  vs.  Giga Media

 Performance 
       Timeline  
Skillz Platform 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Skillz Platform are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Skillz Platform 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

 
Weak
 
Strong
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 latest stock price disarray, may contribute to short-term losses for the investors.

Skillz Platform and Giga Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Skillz Platform and Giga Media

The main advantage of trading using opposite Skillz Platform and Giga Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skillz Platform 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 Skillz Platform 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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