Correlation Between BII Railway and GPT
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and GPT Group, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and GPT.
Diversification Opportunities for BII Railway and GPT
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BII and GPT is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and BII Railway 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 BII Railway Transportation 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 BII Railway i.e., BII Railway and GPT go up and down completely randomly.
Pair Corralation between BII Railway and GPT
Assuming the 90 days horizon BII Railway is expected to generate 8.9 times less return on investment than GPT. In addition to that, BII Railway is 1.03 times more volatile than GPT Group. It trades about 0.0 of its total potential returns per unit of risk. GPT Group is currently generating about 0.03 per unit of volatility. If you would invest 210.00 in GPT Group on January 6, 2025 and sell it today you would earn a total of 40.00 from holding GPT Group or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. GPT Group
Performance |
| Timeline |
| BII Railway Transpor |
| GPT Group |
BII Railway and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and GPT
The main advantage of trading using opposite BII Railway and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.| BII Railway vs. SOUTHWEST AIRLINES | BII Railway vs. Gol Intelligent Airlines | BII Railway vs. United Airlines Holdings | BII Railway vs. Chuangs China Investments |
| GPT vs. Highlight Communications AG | GPT vs. CARSALESCOM | GPT vs. Charter Communications | GPT vs. Cars Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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