Correlation Between Baker Steel and Guaranty Trust

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Can any of the company-specific risk be diversified away by investing in both Baker Steel and Guaranty Trust 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 Baker Steel and Guaranty Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and Guaranty Trust Holding, you can compare the effects of market volatilities on Baker Steel and Guaranty Trust 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 Baker Steel with a short position of Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Guaranty Trust.

Diversification Opportunities for Baker Steel and Guaranty Trust

BakerGuarantyDiversified AwayBakerGuarantyDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Baker and Guaranty is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding and Baker Steel 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 Baker Steel Resources are associated (or correlated) with Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Baker Steel i.e., Baker Steel and Guaranty Trust go up and down completely randomly.

Pair Corralation between Baker Steel and Guaranty Trust

Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 1.01 times more return on investment than Guaranty Trust. However, Baker Steel is 1.01 times more volatile than Guaranty Trust Holding. It trades about 0.18 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.07 per unit of risk. If you would invest  4,750  in Baker Steel Resources on October 20, 2024 and sell it today you would earn a total of  1,050  from holding Baker Steel Resources or generate 22.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Baker Steel Resources  vs.  Guaranty Trust Holding

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -505101520
JavaScript chart by amCharts 3.21.15BSRT GTCO
       Timeline  
Baker Steel Resources 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Baker Steel Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Baker Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan4648505254565860
Guaranty Trust Holding 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Trust Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Guaranty Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.751.81.851.91.952

Baker Steel and Guaranty Trust Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.66-4.24-2.82-1.40.02371.493.034.576.117.65 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15BSRT GTCO
       Returns  

Pair Trading with Baker Steel and Guaranty Trust

The main advantage of trading using opposite Baker Steel and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.
The idea behind Baker Steel Resources and Guaranty Trust Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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