Correlation Between GT Capital and Ayala Land
Can any of the company-specific risk be diversified away by investing in both GT Capital and Ayala Land 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 Land 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 Land, you can compare the effects of market volatilities on GT Capital and Ayala Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Ayala Land.
Diversification Opportunities for GT Capital and Ayala Land
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GTCAP and Ayala is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Land has no effect on the direction of GT Capital i.e., GT Capital and Ayala Land go up and down completely randomly.
Pair Corralation between GT Capital and Ayala Land
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.85 times more return on investment than Ayala Land. However, GT Capital Holdings is 1.17 times less risky than Ayala Land. It trades about -0.19 of its potential returns per unit of risk. Ayala Land is currently generating about -0.21 per unit of risk. If you would invest 72,000 in GT Capital Holdings on September 5, 2024 and sell it today you would lose (6,150) from holding GT Capital Holdings or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GT Capital Holdings vs. Ayala Land
Performance |
| Timeline |
| GT Capital Holdings |
| Ayala Land |
GT Capital and Ayala Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Ayala Land
The main advantage of trading using opposite GT Capital and Ayala Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Ayala Land 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 Land will offset losses from the drop in Ayala Land's long position.| GT Capital vs. GT Capital Holdings | GT Capital vs. Filinvest Land | GT Capital vs. Puregold Price Club | GT Capital vs. Century Pacific Food |
| Ayala Land vs. Filinvest Development Coproration | Ayala Land vs. Vista Land and | Ayala Land vs. GT Capital Holdings | Ayala Land vs. Allhome Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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