Correlation Between Country Club and GPT Healthcare

Can any of the company-specific risk be diversified away by investing in both Country Club and GPT Healthcare 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 Country Club and GPT Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Country Club Hospitality and GPT Healthcare, you can compare the effects of market volatilities on Country Club and GPT Healthcare 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 Country Club with a short position of GPT Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Club and GPT Healthcare.

Diversification Opportunities for Country Club and GPT Healthcare

0.71

Correlation Coefficient

Country Club  GPT Healthcare

Poor diversification

The 3 months correlation between Country and GPT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Country Club Hospitality and GPT Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Healthcare and Country Club 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 Country Club Hospitality are associated (or correlated) with GPT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Healthcare has no effect on the direction of Country Club i.e., Country Club and GPT Healthcare go up and down completely randomly.

Pair Corralation between Country Club and GPT Healthcare

Assuming the 90 days trading horizon Country Club Hospitality is expected to under-perform the GPT Healthcare. In addition to that, Country Club is 1.52 times more volatile than GPT Healthcare. It trades about -0.12 of its total potential returns per unit of risk. GPT Healthcare is currently generating about -0.13 per unit of volatility. If you would invest  16,597  in GPT Healthcare on November 20, 2024 and sell it today you would lose (2,632) from holding GPT Healthcare or give up 15.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Country Club Hospitality  vs.  GPT Healthcare

Country Club Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Country Club Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GPT Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days GPT Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Country Club and GPT Healthcare

The main advantage of trading using opposite Country Club and GPT Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Club position performs unexpectedly, GPT Healthcare 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 GPT Healthcare will offset losses from the drop in GPT Healthcare's long position.

The idea behind Country Club Hospitality and GPT Healthcare 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.