Correlation Between Asia United and GT Capital
Can any of the company-specific risk be diversified away by investing in both Asia United 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 Asia United and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and GT Capital Holdings, you can compare the effects of market volatilities on Asia United 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 Asia United with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and GT Capital.
Diversification Opportunities for Asia United and GT Capital
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and GTCAP is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank 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 Asia United 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 Asia United Bank 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 Asia United i.e., Asia United and GT Capital go up and down completely randomly.
Pair Corralation between Asia United and GT Capital
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.83 times more return on investment than GT Capital. However, Asia United Bank is 1.21 times less risky than GT Capital. It trades about 0.29 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.08 per unit of risk. If you would invest 4,551 in Asia United Bank on November 2, 2024 and sell it today you would earn a total of 2,544 from holding Asia United Bank or generate 55.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.02% |
| Values | Daily Returns |
Asia United Bank vs. GT Capital Holdings
Performance |
| Timeline |
| Asia United Bank |
| GT Capital Holdings |
Asia United and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and GT Capital
The main advantage of trading using opposite Asia United and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United 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.| Asia United vs. National Reinsurance | Asia United vs. Integrated Micro Electronics | Asia United vs. Converge Information Communications | Asia United vs. Philippine Business Bank |
| GT Capital vs. Rizal Commercial Banking | GT Capital vs. East West Banking | GT Capital vs. SM Investments Corp | GT Capital vs. First Abacus Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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