Correlation Between Crown Castle and GPT
Can any of the company-specific risk be diversified away by investing in both Crown Castle and GPT 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 Crown Castle and GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Castle International and GPT Group, you can compare the effects of market volatilities on Crown Castle and GPT 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 Crown Castle with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Castle and GPT.
Diversification Opportunities for Crown Castle and GPT
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crown and GPT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Crown Castle International and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and Crown Castle 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 Crown Castle International are associated (or correlated) with GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of Crown Castle i.e., Crown Castle and GPT go up and down completely randomly.
Pair Corralation between Crown Castle and GPT
Assuming the 90 days horizon Crown Castle is expected to generate 1.41 times less return on investment than GPT. But when comparing it to its historical volatility, Crown Castle International is 1.32 times less risky than GPT. It trades about 0.08 of its potential returns per unit of risk. GPT Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 275.00 in GPT Group on September 4, 2024 and sell it today you would earn a total of 11.00 from holding GPT Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Castle International vs. GPT Group
Performance |
| Timeline |
| Crown Castle Interna |
| GPT Group |
Crown Castle and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Castle and GPT
The main advantage of trading using opposite Crown Castle and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Castle position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| Crown Castle vs. Fast Retailing Co | Crown Castle vs. INDOFOOD AGRI RES | Crown Castle vs. Globe Trade Centre | Crown Castle vs. Dairy Farm International |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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