Correlation Between Philippine Business and GT Capital
Can any of the company-specific risk be diversified away by investing in both Philippine Business 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 Philippine Business and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philippine Business Bank and GT Capital Holdings, you can compare the effects of market volatilities on Philippine Business 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 Philippine Business with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Business and GT Capital.
Diversification Opportunities for Philippine Business and GT Capital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Philippine and GTCAP is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank 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 Philippine Business 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 Philippine Business Bank 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 Philippine Business i.e., Philippine Business and GT Capital go up and down completely randomly.
Pair Corralation between Philippine Business and GT Capital
Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 0.85 times more return on investment than GT Capital. However, Philippine Business Bank is 1.18 times less risky than GT Capital. It trades about 0.12 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.18 per unit of risk. If you would invest 940.00 in Philippine Business Bank on October 20, 2024 and sell it today you would earn a total of 31.00 from holding Philippine Business Bank or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Philippine Business Bank vs. GT Capital Holdings
Performance |
| Timeline |
| Philippine Business Bank |
| GT Capital Holdings |
Philippine Business and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Business and GT Capital
The main advantage of trading using opposite Philippine Business and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Business 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.| Philippine Business vs. BDO Unibank | Philippine Business vs. Metropolitan Bank Trust | Philippine Business vs. Security Bank Corp | Philippine Business vs. Union Bank of |
| GT Capital vs. GT Capital Holdings | GT Capital vs. Atok Big Wedge | GT Capital vs. ArthaLand Corp Preferred | GT Capital vs. Citicore Energy REIT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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