Correlation Between GT Capital and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both GT Capital and Metropolitan Bank 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 Metropolitan Bank 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 Metropolitan Bank Trust, you can compare the effects of market volatilities on GT Capital and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Metropolitan Bank.
Diversification Opportunities for GT Capital and Metropolitan Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GTCAP and Metropolitan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of GT Capital i.e., GT Capital and Metropolitan Bank go up and down completely randomly.
Pair Corralation between GT Capital and Metropolitan Bank
Assuming the 90 days trading horizon GT Capital Holdings is expected to under-perform the Metropolitan Bank. But the stock apears to be less risky and, when comparing its historical volatility, GT Capital Holdings is 1.02 times less risky than Metropolitan Bank. The stock trades about -0.19 of its potential returns per unit of risk. The Metropolitan Bank Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,550 in Metropolitan Bank Trust on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Metropolitan Bank Trust or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GT Capital Holdings vs. Metropolitan Bank Trust
Performance |
| Timeline |
| GT Capital Holdings |
| Metropolitan Bank Trust |
GT Capital and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Metropolitan Bank
The main advantage of trading using opposite GT Capital and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's 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 |
| Metropolitan Bank vs. Security Bank Corp | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Philippine National Bank | Metropolitan Bank vs. Philippine Savings Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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