Correlation Between GT Capital and Aboitiz Power
Can any of the company-specific risk be diversified away by investing in both GT Capital and Aboitiz Power 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 Aboitiz Power 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 Aboitiz Power Corp, you can compare the effects of market volatilities on GT Capital and Aboitiz Power 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 Aboitiz Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Aboitiz Power.
Diversification Opportunities for GT Capital and Aboitiz Power
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GTCAP and Aboitiz is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Aboitiz Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Power 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 Aboitiz Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Power Corp has no effect on the direction of GT Capital i.e., GT Capital and Aboitiz Power go up and down completely randomly.
Pair Corralation between GT Capital and Aboitiz Power
Assuming the 90 days trading horizon GT Capital Holdings is expected to under-perform the Aboitiz Power. In addition to that, GT Capital is 1.69 times more volatile than Aboitiz Power Corp. It trades about -0.18 of its total potential returns per unit of risk. Aboitiz Power Corp is currently generating about 0.21 per unit of volatility. If you would invest 3,770 in Aboitiz Power Corp on October 20, 2024 and sell it today you would earn a total of 175.00 from holding Aboitiz Power Corp or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GT Capital Holdings vs. Aboitiz Power Corp
Performance |
| Timeline |
| GT Capital Holdings |
| Aboitiz Power Corp |
GT Capital and Aboitiz Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Aboitiz Power
The main advantage of trading using opposite GT Capital and Aboitiz Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Aboitiz Power 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 Aboitiz Power will offset losses from the drop in Aboitiz Power's long position.| GT Capital vs. Apex Mining Co | GT Capital vs. Security Bank Corp | GT Capital vs. Asia United Bank | GT Capital vs. Crown Asia Chemicals |
| Aboitiz Power vs. Suntrust Home Developers | Aboitiz Power vs. Philex Mining Corp | Aboitiz Power vs. Converge Information Communications | Aboitiz Power vs. Top Frontier Investment |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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