Correlation Between G Capital and Autocorp Holding

Can any of the company-specific risk be diversified away by investing in both G Capital and Autocorp Holding 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 Autocorp Holding 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 Autocorp Holding Public, you can compare the effects of market volatilities on G Capital and Autocorp Holding 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 Autocorp Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and Autocorp Holding.

Diversification Opportunities for G Capital and Autocorp Holding

0.59

Correlation Coefficient

G Capital  Autocorp Holding

Very weak diversification

The 3 months correlation between GCAP and Autocorp is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and Autocorp Holding Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autocorp Holding Public 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 Autocorp Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autocorp Holding Public has no effect on the direction of G Capital i.e., G Capital and Autocorp Holding go up and down completely randomly.

Pair Corralation between G Capital and Autocorp Holding

Assuming the 90 days trading horizon G Capital Public is expected to under-perform the Autocorp Holding. In addition to that, G Capital is 1.73 times more volatile than Autocorp Holding Public. It trades about -0.06 of its total potential returns per unit of risk. Autocorp Holding Public is currently generating about -0.1 per unit of volatility. If you would invest  90.00  in Autocorp Holding Public on December 1, 2024 and sell it today you would lose (14.00) from holding Autocorp Holding Public or give up 15.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

G Capital Public  vs.  Autocorp Holding Public

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.

Autocorp Holding Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Autocorp Holding Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators 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 Autocorp Holding

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

The idea behind G Capital Public and Autocorp Holding 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.