Correlation Between GT Capital and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both GT Capital and Benguet 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 Benguet 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 Benguet Corp A, you can compare the effects of market volatilities on GT Capital and Benguet 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 Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Benguet Corp.
Diversification Opportunities for GT Capital and Benguet Corp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GTCAP and Benguet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A 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 Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of GT Capital i.e., GT Capital and Benguet Corp go up and down completely randomly.
Pair Corralation between GT Capital and Benguet Corp
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.49 times more return on investment than Benguet Corp. However, GT Capital Holdings is 2.06 times less risky than Benguet Corp. It trades about -0.21 of its potential returns per unit of risk. Benguet Corp A is currently generating about -0.11 per unit of risk. If you would invest 72,000 in GT Capital Holdings on September 1, 2024 and sell it today you would lose (6,500) from holding GT Capital Holdings or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GT Capital Holdings vs. Benguet Corp A
Performance |
| Timeline |
| GT Capital Holdings |
| Benguet Corp A |
GT Capital and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Benguet Corp
The main advantage of trading using opposite GT Capital and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Benguet 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| GT Capital vs. Rizal Commercial Banking | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. SM Investments Corp | GT Capital vs. Security Bank 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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