Correlation Between GPT Healthcare and Transport

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

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

Diversification Opportunities for GPT Healthcare and Transport

0.4

Correlation Coefficient

GPT Healthcare  Transport

Very weak diversification

The 3 months correlation between GPT and Transport is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GPT Healthcare and Transport of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and GPT Healthcare 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 GPT Healthcare are associated (or correlated) with Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport has no effect on the direction of GPT Healthcare i.e., GPT Healthcare and Transport go up and down completely randomly.

Pair Corralation between GPT Healthcare and Transport

Assuming the 90 days trading horizon GPT Healthcare is expected to generate 595.0 times less return on investment than Transport. But when comparing it to its historical volatility, GPT Healthcare is 2.22 times less risky than Transport. It trades about 0.0 of its potential returns per unit of risk. Transport of is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  82,161  in Transport of on October 9, 2024 and sell it today you would earn a total of  29,289  from holding Transport of or generate 35.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.89%
Values	Daily Returns

GPT Healthcare  vs.  Transport of

GPT Healthcare

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GPT Healthcare are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, GPT Healthcare is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Transport

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transport of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Transport may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GPT Healthcare and Transport

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

The idea behind GPT Healthcare and Transport of 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.