Correlation Between STI Education and GT Capital
Can any of the company-specific risk be diversified away by investing in both STI Education 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 STI Education and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and GT Capital Holdings, you can compare the effects of market volatilities on STI Education 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 STI Education with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and GT Capital.
Diversification Opportunities for STI Education and GT Capital
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STI and GTCAP is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems 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 STI Education 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 STI Education Systems 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 STI Education i.e., STI Education and GT Capital go up and down completely randomly.
Pair Corralation between STI Education and GT Capital
Assuming the 90 days trading horizon STI Education Systems is expected to generate 0.81 times more return on investment than GT Capital. However, STI Education Systems is 1.23 times less risky than GT Capital. It trades about -0.04 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.21 per unit of risk. If you would invest 123.00 in STI Education Systems on September 1, 2024 and sell it today you would lose (2.00) from holding STI Education Systems or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STI Education Systems vs. GT Capital Holdings
Performance |
| Timeline |
| STI Education Systems |
| GT Capital Holdings |
STI Education and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and GT Capital
The main advantage of trading using opposite STI Education and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education 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.| STI Education vs. Allhome Corp | STI Education vs. LFM Properties Corp | STI Education vs. Altus Property Ventures | STI Education vs. Monde Nissin Corp |
| GT Capital vs. Rizal Commercial Banking | GT Capital vs. Metropolitan Bank Trust | GT Capital vs. SM Investments Corp | GT Capital vs. Security Bank 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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