Correlation Between Rizal Commercial and GT Capital
Can any of the company-specific risk be diversified away by investing in both Rizal Commercial 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 Rizal Commercial and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rizal Commercial Banking and GT Capital Holdings, you can compare the effects of market volatilities on Rizal Commercial 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 Rizal Commercial with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rizal Commercial and GT Capital.
Diversification Opportunities for Rizal Commercial and GT Capital
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rizal and GTCAP is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rizal Commercial Banking 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 Rizal Commercial 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 Rizal Commercial Banking 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 Rizal Commercial i.e., Rizal Commercial and GT Capital go up and down completely randomly.
Pair Corralation between Rizal Commercial and GT Capital
Assuming the 90 days trading horizon Rizal Commercial Banking is expected to generate 1.62 times more return on investment than GT Capital. However, Rizal Commercial is 1.62 times more volatile than GT Capital Holdings. It trades about 0.08 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.68 per unit of risk. If you would invest 2,480 in Rizal Commercial Banking on November 3, 2024 and sell it today you would earn a total of 95.00 from holding Rizal Commercial Banking or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rizal Commercial Banking vs. GT Capital Holdings
Performance |
| Timeline |
| Rizal Commercial Banking |
| GT Capital Holdings |
Rizal Commercial and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rizal Commercial and GT Capital
The main advantage of trading using opposite Rizal Commercial and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rizal Commercial 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.| Rizal Commercial vs. Top Frontier Investment | Rizal Commercial vs. Converge Information Communications | Rizal Commercial vs. Philex Mining Corp | Rizal Commercial vs. Concepcion Industrial Corp |
| GT Capital vs. Asia United Bank | GT Capital vs. Apex Mining Co | GT Capital vs. Philex Mining Corp | GT Capital vs. Lepanto Consolidated Mining |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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