Correlation Between Globe Telecom and GT Capital
Can any of the company-specific risk be diversified away by investing in both Globe Telecom 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 Globe Telecom and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and GT Capital Holdings, you can compare the effects of market volatilities on Globe Telecom 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 Globe Telecom with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and GT Capital.
Diversification Opportunities for Globe Telecom and GT Capital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and GTCAP is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom 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 Globe Telecom 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 Globe Telecom 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 Globe Telecom i.e., Globe Telecom and GT Capital go up and down completely randomly.
Pair Corralation between Globe Telecom and GT Capital
Assuming the 90 days trading horizon Globe Telecom is expected to generate 4.63 times less return on investment than GT Capital. But when comparing it to its historical volatility, Globe Telecom is 1.3 times less risky than GT Capital. It trades about 0.02 of its potential returns per unit of risk. GT Capital Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 42,353 in GT Capital Holdings on September 12, 2024 and sell it today you would earn a total of 22,347 from holding GT Capital Holdings or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Telecom vs. GT Capital Holdings
Performance |
| Timeline |
| Globe Telecom |
| GT Capital Holdings |
Globe Telecom and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and GT Capital
The main advantage of trading using opposite Globe Telecom and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom 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.| Globe Telecom vs. GT Capital Holdings | Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp |
| GT Capital vs. Philex Mining Corp | GT Capital vs. Robinsons Retail Holdings | GT Capital vs. Apex Mining Co | GT Capital vs. Century Pacific Food |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |