Correlation Between Filter Vision and G Capital

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

By analyzing existing cross correlation between Filter Vision Public and G Capital Public, you can compare the effects of market volatilities on Filter Vision and G 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 Filter Vision with a short position of G Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filter Vision and G Capital.

Diversification Opportunities for Filter Vision and G Capital

0.55

Correlation Coefficient

Filter Vision  G Capital

Very weak diversification

The 3 months correlation between Filter and GCAP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Filter Vision Public and G Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Capital Public and Filter Vision 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 Filter Vision Public are associated (or correlated) with G Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Capital Public has no effect on the direction of Filter Vision i.e., Filter Vision and G Capital go up and down completely randomly.

Pair Corralation between Filter Vision and G Capital

Assuming the 90 days trading horizon Filter Vision Public is expected to under-perform the G Capital. But the stock apears to be less risky and, when comparing its historical volatility, Filter Vision Public is 1.35 times less risky than G Capital. The stock trades about -0.21 of its potential returns per unit of risk. The G Capital Public is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  36.00  in G Capital Public on November 30, 2024 and sell it today you would lose (7.00) from holding G Capital Public or give up 19.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Filter Vision Public  vs.  G Capital Public

Filter Vision Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Filter Vision Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental 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.

G Capital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals 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 Filter Vision and G Capital

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

The idea behind Filter Vision Public and G Capital Public 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.