Correlation Between GT Capital and Metro Retail
Can any of the company-specific risk be diversified away by investing in both GT Capital and Metro Retail 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 Metro Retail 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 Metro Retail Stores, you can compare the effects of market volatilities on GT Capital and Metro Retail 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 Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Metro Retail.
Diversification Opportunities for GT Capital and Metro Retail
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GTCAP and Metro is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores 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 Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of GT Capital i.e., GT Capital and Metro Retail go up and down completely randomly.
Pair Corralation between GT Capital and Metro Retail
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 1.24 times more return on investment than Metro Retail. However, GT Capital is 1.24 times more volatile than Metro Retail Stores. It trades about 0.05 of its potential returns per unit of risk. Metro Retail Stores is currently generating about -0.02 per unit of risk. If you would invest 59,266 in GT Capital Holdings on September 3, 2024 and sell it today you would earn a total of 6,234 from holding GT Capital Holdings or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
GT Capital Holdings vs. Metro Retail Stores
Performance |
| Timeline |
| GT Capital Holdings |
| Metro Retail Stores |
GT Capital and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Metro Retail
The main advantage of trading using opposite GT Capital and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Union Bank of | GT Capital vs. Semirara Mining Corp | GT Capital vs. Concepcion Industrial Corp |
| Metro Retail vs. GT Capital Holdings | Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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