Correlation Between GT Capital and Pacificonline Systems
Can any of the company-specific risk be diversified away by investing in both GT Capital and Pacificonline Systems 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 Pacificonline Systems 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 Pacificonline Systems, you can compare the effects of market volatilities on GT Capital and Pacificonline Systems 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 Pacificonline Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Pacificonline Systems.
Diversification Opportunities for GT Capital and Pacificonline Systems
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GTCAP and Pacificonline is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Pacificonline Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacificonline Systems 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 Pacificonline Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacificonline Systems has no effect on the direction of GT Capital i.e., GT Capital and Pacificonline Systems go up and down completely randomly.
Pair Corralation between GT Capital and Pacificonline Systems
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.5 times more return on investment than Pacificonline Systems. However, GT Capital Holdings is 1.99 times less risky than Pacificonline Systems. It trades about -0.19 of its potential returns per unit of risk. Pacificonline Systems is currently generating about -0.24 per unit of risk. If you would invest 72,000 in GT Capital Holdings on September 4, 2024 and sell it today you would lose (6,050) from holding GT Capital Holdings or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GT Capital Holdings vs. Pacificonline Systems
Performance |
| Timeline |
| GT Capital Holdings |
| Pacificonline Systems |
GT Capital and Pacificonline Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Pacificonline Systems
The main advantage of trading using opposite GT Capital and Pacificonline Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Pacificonline Systems 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 Pacificonline Systems will offset losses from the drop in Pacificonline Systems' long position.| GT Capital vs. Semirara Mining Corp | GT Capital vs. Globe Telecom | GT Capital vs. Rizal Commercial Banking | GT Capital vs. Sun Life Financial |
| Pacificonline Systems vs. Figaro Coffee Group | Pacificonline Systems vs. GT Capital Holdings | Pacificonline Systems vs. Allhome Corp | Pacificonline Systems vs. LFM Properties 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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