Correlation Between Balai Ni and GT Capital
Can any of the company-specific risk be diversified away by investing in both Balai Ni 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 Balai Ni and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balai Ni Fruitas and GT Capital Holdings, you can compare the effects of market volatilities on Balai Ni 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 Balai Ni with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balai Ni and GT Capital.
Diversification Opportunities for Balai Ni and GT Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balai and GTPPB is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Balai Ni Fruitas 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 Balai Ni 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 Balai Ni Fruitas 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 Balai Ni i.e., Balai Ni and GT Capital go up and down completely randomly.
Pair Corralation between Balai Ni and GT Capital
Assuming the 90 days trading horizon Balai Ni Fruitas is expected to under-perform the GT Capital. In addition to that, Balai Ni is 2.04 times more volatile than GT Capital Holdings. It trades about -0.06 of its total potential returns per unit of risk. GT Capital Holdings is currently generating about 0.07 per unit of volatility. If you would invest 91,552 in GT Capital Holdings on August 29, 2024 and sell it today you would earn a total of 4,448 from holding GT Capital Holdings or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.57% |
| Values | Daily Returns |
Balai Ni Fruitas vs. GT Capital Holdings
Performance |
| Timeline |
| Balai Ni Fruitas |
| GT Capital Holdings |
Balai Ni and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balai Ni and GT Capital
The main advantage of trading using opposite Balai Ni and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balai Ni 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.The idea behind Balai Ni Fruitas and GT Capital Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GT Capital vs. COL Financial Group | GT Capital vs. Sun Life Financial | GT Capital vs. Robinsons Retail Holdings | GT Capital vs. Atlas Consolidated Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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