Correlation Between GTM Holdings and De Licacy
Can any of the company-specific risk be diversified away by investing in both GTM Holdings and De Licacy 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 GTM Holdings and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GTM Holdings Corp and De Licacy Industrial, you can compare the effects of market volatilities on GTM Holdings and De Licacy 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 GTM Holdings with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTM Holdings and De Licacy.
Diversification Opportunities for GTM Holdings and De Licacy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GTM and 1464 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GTM Holdings Corp and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and GTM Holdings 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 GTM Holdings Corp are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of GTM Holdings i.e., GTM Holdings and De Licacy go up and down completely randomly.
Pair Corralation between GTM Holdings and De Licacy
Assuming the 90 days trading horizon GTM Holdings Corp is expected to generate 0.19 times more return on investment than De Licacy. However, GTM Holdings Corp is 5.35 times less risky than De Licacy. It trades about 0.08 of its potential returns per unit of risk. De Licacy Industrial is currently generating about 0.01 per unit of risk. If you would invest 3,395 in GTM Holdings Corp on September 5, 2024 and sell it today you would earn a total of 35.00 from holding GTM Holdings Corp or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GTM Holdings Corp vs. De Licacy Industrial
Performance |
| Timeline |
| GTM Holdings Corp |
| De Licacy Industrial |
GTM Holdings and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GTM Holdings and De Licacy
The main advantage of trading using opposite GTM Holdings and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GTM Holdings position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| GTM Holdings vs. Taiwan Semiconductor Manufacturing | GTM Holdings vs. Yang Ming Marine | GTM Holdings vs. AU Optronics | GTM Holdings vs. Nan Ya Plastics |
| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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