Correlation Between Aboitiz Power and GT Capital
Can any of the company-specific risk be diversified away by investing in both Aboitiz Power and GT Capital 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 Aboitiz Power and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aboitiz Power Corp and GT Capital Holdings, you can compare the effects of market volatilities on Aboitiz Power and GT Capital 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 Aboitiz Power with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aboitiz Power and GT Capital.
Diversification Opportunities for Aboitiz Power and GT Capital
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aboitiz and GTCAP is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aboitiz Power Corp and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings and Aboitiz Power 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 Aboitiz Power Corp are associated (or correlated) with GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of Aboitiz Power i.e., Aboitiz Power and GT Capital go up and down completely randomly.
Pair Corralation between Aboitiz Power and GT Capital
Assuming the 90 days trading horizon Aboitiz Power is expected to generate 1.94 times less return on investment than GT Capital. But when comparing it to its historical volatility, Aboitiz Power Corp is 1.72 times less risky than GT Capital. It trades about 0.03 of its potential returns per unit of risk. GT Capital Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 55,887 in GT Capital Holdings on September 14, 2024 and sell it today you would earn a total of 9,113 from holding GT Capital Holdings or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aboitiz Power Corp vs. GT Capital Holdings
Performance |
| Timeline |
| Aboitiz Power Corp |
| GT Capital Holdings |
Aboitiz Power and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aboitiz Power and GT Capital
The main advantage of trading using opposite Aboitiz Power and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aboitiz Power position performs unexpectedly, GT Capital 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 GT Capital will offset losses from the drop in GT Capital's long position.| Aboitiz Power vs. Dizon Copper Silver | Aboitiz Power vs. GT Capital Holdings | Aboitiz Power vs. Allhome Corp | Aboitiz Power vs. Jollibee Foods Corp |
| GT Capital vs. Premiere Entertainment | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Figaro Coffee Group | GT Capital vs. Philippine Business Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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