Correlation Between COL Financial and GT Capital
Can any of the company-specific risk be diversified away by investing in both COL Financial 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 COL Financial and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and GT Capital Holdings, you can compare the effects of market volatilities on COL Financial 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 COL Financial with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and GT Capital.
Diversification Opportunities for COL Financial and GT Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between COL and GTPPB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group 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 COL Financial 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 COL Financial Group 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 COL Financial i.e., COL Financial and GT Capital go up and down completely randomly.
Pair Corralation between COL Financial and GT Capital
Assuming the 90 days trading horizon COL Financial Group is expected to under-perform the GT Capital. In addition to that, COL Financial is 5.25 times more volatile than GT Capital Holdings. It trades about -0.31 of its total potential returns per unit of risk. GT Capital Holdings is currently generating about -0.12 per unit of volatility. If you would invest 96,000 in GT Capital Holdings on September 1, 2024 and sell it today you would lose (500.00) from holding GT Capital Holdings or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.62% |
| Values | Daily Returns |
COL Financial Group vs. GT Capital Holdings
Performance |
| Timeline |
| COL Financial Group |
| GT Capital Holdings |
COL Financial and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Financial and GT Capital
The main advantage of trading using opposite COL Financial and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial 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.| COL Financial vs. Bright Kindle Resources | COL Financial vs. Allhome Corp | COL Financial vs. LFM Properties Corp | COL Financial vs. Altus Property Ventures |
| GT Capital vs. GT Capital Holdings | GT Capital vs. Allhome Corp | GT Capital vs. LFM Properties Corp | GT Capital vs. Altus Property Ventures |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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