Correlation Between GT Capital and Ayala Corp
Can any of the company-specific risk be diversified away by investing in both GT Capital and Ayala Corp 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 GT Capital and Ayala Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GT Capital Holdings and Ayala Corp, you can compare the effects of market volatilities on GT Capital and Ayala Corp 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 GT Capital with a short position of Ayala Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Ayala Corp.
Diversification Opportunities for GT Capital and Ayala Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GTCAP and Ayala is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Ayala Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Corp and GT Capital 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 GT Capital Holdings are associated (or correlated) with Ayala Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Corp has no effect on the direction of GT Capital i.e., GT Capital and Ayala Corp go up and down completely randomly.
Pair Corralation between GT Capital and Ayala Corp
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.93 times more return on investment than Ayala Corp. However, GT Capital Holdings is 1.07 times less risky than Ayala Corp. It trades about 0.02 of its potential returns per unit of risk. Ayala Corp is currently generating about 0.0 per unit of risk. If you would invest 64,500 in GT Capital Holdings on September 2, 2024 and sell it today you would earn a total of 1,000.00 from holding GT Capital Holdings or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GT Capital Holdings vs. Ayala Corp
Performance |
| Timeline |
| GT Capital Holdings |
| Ayala Corp |
GT Capital and Ayala Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Ayala Corp
The main advantage of trading using opposite GT Capital and Ayala Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Ayala Corp 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 Ayala Corp will offset losses from the drop in Ayala Corp's long position.| GT Capital vs. Philex Mining Corp | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Apex Mining Co | GT Capital vs. STI Education Systems |
| Ayala Corp vs. Semirara Mining Corp | Ayala Corp vs. Philex Mining Corp | Ayala Corp vs. Transpacific Broadband Group | Ayala Corp vs. Prime Media Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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