Correlation Between GT Capital and Rizal Commercial
Can any of the company-specific risk be diversified away by investing in both GT Capital and Rizal Commercial 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 Rizal Commercial 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 Rizal Commercial Banking, you can compare the effects of market volatilities on GT Capital and Rizal Commercial 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 Rizal Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Rizal Commercial.
Diversification Opportunities for GT Capital and Rizal Commercial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GTCAP and Rizal is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Rizal Commercial Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rizal Commercial Banking 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 Rizal Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rizal Commercial Banking has no effect on the direction of GT Capital i.e., GT Capital and Rizal Commercial go up and down completely randomly.
Pair Corralation between GT Capital and Rizal Commercial
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.77 times more return on investment than Rizal Commercial. However, GT Capital Holdings is 1.3 times less risky than Rizal Commercial. It trades about -0.21 of its potential returns per unit of risk. Rizal Commercial Banking is currently generating about -0.23 per unit of risk. If you would invest 72,000 in GT Capital Holdings on September 2, 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 Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GT Capital Holdings vs. Rizal Commercial Banking
Performance |
| Timeline |
| GT Capital Holdings |
| Rizal Commercial Banking |
GT Capital and Rizal Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Rizal Commercial
The main advantage of trading using opposite GT Capital and Rizal Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Rizal Commercial 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 Rizal Commercial will offset losses from the drop in Rizal Commercial's long position.| GT Capital vs. Philex Mining Corp | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Apex Mining Co | GT Capital vs. STI Education Systems |
| Rizal Commercial vs. GT Capital Holdings | Rizal Commercial vs. Allhome Corp | Rizal Commercial vs. Jollibee Foods Corp | Rizal Commercial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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