Correlation Between Dizon Copper and GT Capital

Can any of the company-specific risk be diversified away by investing in both Dizon Copper 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 Dizon Copper and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dizon Copper Silver and GT Capital Holdings, you can compare the effects of market volatilities on Dizon Copper 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 Dizon Copper with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dizon Copper and GT Capital.

Diversification Opportunities for Dizon Copper and GT Capital

0.44

Correlation Coefficient

Dizon Copper  GT Capital

Very weak diversification

The 3 months correlation between Dizon and GTCAP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dizon Copper Silver 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 Dizon Copper 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 Dizon Copper Silver 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 Dizon Copper i.e., Dizon Copper and GT Capital go up and down completely randomly.

Pair Corralation between Dizon Copper and GT Capital

Assuming the 90 days trading horizon Dizon Copper Silver is expected to generate 3.0 times more return on investment than GT Capital. However, Dizon Copper is 3.0 times more volatile than GT Capital Holdings. It trades about 0.03 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.19 per unit of risk. If you would invest  201.00  in Dizon Copper Silver on December 2, 2024 and sell it today you would lose (1.00) from holding Dizon Copper Silver or give up 0.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.0%
Values	Daily Returns

Dizon Copper Silver  vs.  GT Capital Holdings

Dizon Copper Silver

Risk-Adjusted Performance

Weak

Over the last 90 days Dizon Copper Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Dizon Copper may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GT Capital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GT Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Dizon Copper and GT Capital

The main advantage of trading using opposite Dizon Copper and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dizon Copper 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.

The idea behind Dizon Copper Silver and GT Capital Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.