Correlation Between GT Capital and Benguet Corp

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

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

Diversification Opportunities for GT Capital and Benguet Corp

-0.31

Correlation Coefficient

GT Capital  Benguet Corp

Very good diversification

The 3 months correlation between GTCAP and Benguet is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and GT 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 GT Capital Holdings are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of GT Capital i.e., GT Capital and Benguet Corp go up and down completely randomly.

Pair Corralation between GT Capital and Benguet Corp

Assuming the 90 days trading horizon GT Capital Holdings is expected to under-perform the Benguet Corp. But the stock apears to be less risky and, when comparing its historical volatility, GT Capital Holdings is 1.8 times less risky than Benguet Corp. The stock trades about -0.09 of its potential returns per unit of risk. The Benguet Corp A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  332.00  in Benguet Corp A on September 17, 2024 and sell it today you would earn a total of  9.00  from holding Benguet Corp A or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.63%
Values	Daily Returns

GT Capital Holdings  vs.  Benguet Corp A

GT Capital Holdings

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Benguet Corp A

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Benguet Corp A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Benguet Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GT Capital and Benguet Corp

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

The idea behind GT Capital Holdings and Benguet Corp A 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.