Correlation Between GT Capital and Transpacific Broadband
Can any of the company-specific risk be diversified away by investing in both GT Capital and Transpacific Broadband 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 Transpacific Broadband 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 Transpacific Broadband Group, you can compare the effects of market volatilities on GT Capital and Transpacific Broadband 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 Transpacific Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of GT Capital and Transpacific Broadband.
Diversification Opportunities for GT Capital and Transpacific Broadband
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GTCAP and Transpacific is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Transpacific Broadband Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transpacific Broadband 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 Transpacific Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transpacific Broadband has no effect on the direction of GT Capital i.e., GT Capital and Transpacific Broadband go up and down completely randomly.
Pair Corralation between GT Capital and Transpacific Broadband
Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.52 times more return on investment than Transpacific Broadband. However, GT Capital Holdings is 1.92 times less risky than Transpacific Broadband. It trades about 0.05 of its potential returns per unit of risk. Transpacific Broadband Group is currently generating about -0.01 per unit of risk. If you would invest 42,747 in GT Capital Holdings on September 13, 2024 and sell it today you would earn a total of 20,653 from holding GT Capital Holdings or generate 48.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.3% |
| Values | Daily Returns |
GT Capital Holdings vs. Transpacific Broadband Group
Performance |
| Timeline |
| GT Capital Holdings |
| Transpacific Broadband |
GT Capital and Transpacific Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GT Capital and Transpacific Broadband
The main advantage of trading using opposite GT Capital and Transpacific Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GT Capital position performs unexpectedly, Transpacific Broadband 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 Transpacific Broadband will offset losses from the drop in Transpacific Broadband's long position.| GT Capital vs. Manulife Financial Corp | GT Capital vs. Philippine Business Bank | GT Capital vs. House of Investments | GT Capital vs. Cebu Air Preferred |
| Transpacific Broadband vs. GT Capital Holdings | Transpacific Broadband vs. Allhome Corp | Transpacific Broadband vs. Jollibee Foods Corp | Transpacific Broadband 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |