Correlation Between De Licacy and GTM Holdings
Can any of the company-specific risk be diversified away by investing in both De Licacy and GTM Holdings 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 De Licacy and GTM Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Licacy Industrial and GTM Holdings Corp, you can compare the effects of market volatilities on De Licacy and GTM Holdings 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 De Licacy with a short position of GTM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and GTM Holdings.
Diversification Opportunities for De Licacy and GTM Holdings
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1464 and GTM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and GTM Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GTM Holdings Corp and De Licacy 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 De Licacy Industrial are associated (or correlated) with GTM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GTM Holdings Corp has no effect on the direction of De Licacy i.e., De Licacy and GTM Holdings go up and down completely randomly.
Pair Corralation between De Licacy and GTM Holdings
Assuming the 90 days trading horizon De Licacy is expected to generate 1.65 times less return on investment than GTM Holdings. In addition to that, De Licacy is 5.35 times more volatile than GTM Holdings Corp. It trades about 0.01 of its total potential returns per unit of risk. GTM Holdings Corp is currently generating about 0.08 per unit of volatility. 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 |
De Licacy Industrial vs. GTM Holdings Corp
Performance |
| Timeline |
| De Licacy Industrial |
| GTM Holdings Corp |
De Licacy and GTM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and GTM Holdings
The main advantage of trading using opposite De Licacy and GTM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, GTM Holdings 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 GTM Holdings will offset losses from the drop in GTM Holdings' long position.| 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 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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