Correlation Between GT Capital and ENEX Energy
Can any of the company-specific risk be diversified away by investing in both GT Capital and ENEX Energy 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 ENEX Energy 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 ENEX Energy Corp, you can compare the effects of market volatilities on GT Capital and ENEX Energy 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 ENEX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and ENEX Energy.
Diversification Opportunities for GT Capital and ENEX Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GTCAP and ENEX is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and ENEX Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEX Energy 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 ENEX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEX Energy Corp has no effect on the direction of GT Capital i.e., GT Capital and ENEX Energy go up and down completely randomly.
Pair Corralation between GT Capital and ENEX Energy
Assuming the 90 days trading horizon GT Capital is expected to generate 1.17 times less return on investment than ENEX Energy. But when comparing it to its historical volatility, GT Capital Holdings is 2.45 times less risky than ENEX Energy. It trades about 0.03 of its potential returns per unit of risk. ENEX Energy Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 443.00 in ENEX Energy Corp on September 1, 2024 and sell it today you would lose (18.00) from holding ENEX Energy Corp or give up 4.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.32% |
| Values | Daily Returns |
GT Capital Holdings vs. ENEX Energy Corp
Performance |
| Timeline |
| GT Capital Holdings |
| ENEX Energy Corp |
GT Capital and ENEX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and ENEX Energy
The main advantage of trading using opposite GT Capital and ENEX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, ENEX Energy 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 ENEX Energy will offset losses from the drop in ENEX Energy'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 |
| ENEX Energy vs. Oriental Petroleum and | ENEX Energy vs. Oriental Petroleum and | ENEX Energy vs. Basic Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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