Correlation Between SM Investments and GT Capital
Can any of the company-specific risk be diversified away by investing in both SM Investments 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 SM Investments and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Investments Corp and GT Capital Holdings, you can compare the effects of market volatilities on SM Investments 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 SM Investments with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and GT Capital.
Diversification Opportunities for SM Investments and GT Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SM Investments and GTCAP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments Corp 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 SM Investments 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 SM Investments Corp 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 SM Investments i.e., SM Investments and GT Capital go up and down completely randomly.
Pair Corralation between SM Investments and GT Capital
Assuming the 90 days trading horizon SM Investments Corp is expected to under-perform the GT Capital. But the stock apears to be less risky and, when comparing its historical volatility, SM Investments Corp is 1.36 times less risky than GT Capital. The stock trades about -0.03 of its potential returns per unit of risk. The GT Capital Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 69,567 in GT Capital Holdings on September 3, 2024 and sell it today you would lose (4,067) from holding GT Capital Holdings or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Investments Corp vs. GT Capital Holdings
Performance |
| Timeline |
| SM Investments Corp |
| GT Capital Holdings |
SM Investments and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Investments and GT Capital
The main advantage of trading using opposite SM Investments and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments 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.| SM Investments vs. DMCI Holdings | SM Investments vs. GT Capital Holdings | SM Investments vs. Allhome Corp | SM Investments vs. Jollibee Foods Corp |
| GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Union Bank of | GT Capital vs. Semirara Mining Corp | GT Capital vs. Concepcion Industrial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |