Correlation Between G Capital and ASIA Capital

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

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

Diversification Opportunities for G Capital and ASIA Capital

0.16

Correlation Coefficient

G Capital  ASIA Capital

Average diversification

The 3 months correlation between GCAP and ASIA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and ASIA Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASIA Capital Group and G Capital 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 G Capital Public are associated (or correlated) with ASIA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASIA Capital Group has no effect on the direction of G Capital i.e., G Capital and ASIA Capital go up and down completely randomly.

Pair Corralation between G Capital and ASIA Capital

Assuming the 90 days trading horizon G Capital Public is expected to generate 0.33 times more return on investment than ASIA Capital. However, G Capital Public is 3.05 times less risky than ASIA Capital. It trades about -0.06 of its potential returns per unit of risk. ASIA Capital Group is currently generating about -0.13 per unit of risk. If you would invest  36.00  in G Capital Public on December 1, 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

G Capital Public  vs.  ASIA Capital Group

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ASIA Capital Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASIA Capital Group 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with G Capital and ASIA Capital

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

The idea behind G Capital Public and ASIA Capital Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.