Correlation Between Integrated Micro and GT Capital
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and GT Capital 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 Integrated Micro and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and GT Capital Holdings, you can compare the effects of market volatilities on Integrated Micro and GT Capital 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 Integrated Micro with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and GT Capital.
Diversification Opportunities for Integrated Micro and GT Capital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integrated and GTCAP is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of Integrated Micro i.e., Integrated Micro and GT Capital go up and down completely randomly.
Pair Corralation between Integrated Micro and GT Capital
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to generate 1.34 times more return on investment than GT Capital. However, Integrated Micro is 1.34 times more volatile than GT Capital Holdings. It trades about 0.06 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.05 per unit of risk. If you would invest 150.00 in Integrated Micro Electronics on December 1, 2024 and sell it today you would earn a total of 5.00 from holding Integrated Micro Electronics or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Micro Electronics vs. GT Capital Holdings
Performance |
| Timeline |
| Integrated Micro Ele |
| GT Capital Holdings |
Integrated Micro and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and GT Capital
The main advantage of trading using opposite Integrated Micro and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, GT Capital 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 GT Capital will offset losses from the drop in GT Capital's long position.| Integrated Micro vs. Cirtek Holdings Philippines | Integrated Micro vs. Cirtek Holdings Philippines | Integrated Micro vs. Philex Mining Corp | Integrated Micro vs. Rizal Commercial Banking |
| GT Capital vs. SM Investments Corp | GT Capital vs. National Reinsurance | GT Capital vs. Cebu Air Preferred | GT Capital vs. COL Financial Group |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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