Correlation Between GT Capital and Top Frontier

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

Diversification Opportunities for GT Capital and Top Frontier

0.53

Correlation Coefficient

GT Capital  Top Frontier

Very weak diversification

The 3 months correlation between GTCAP and Top is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment 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 Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of GT Capital i.e., GT Capital and Top Frontier go up and down completely randomly.

Pair Corralation between GT Capital and Top Frontier

Assuming the 90 days trading horizon GT Capital Holdings is expected to under-perform the Top Frontier. But the stock apears to be less risky and, when comparing its historical volatility, GT Capital Holdings is 1.43 times less risky than Top Frontier. The stock trades about -0.17 of its potential returns per unit of risk. The Top Frontier Investment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,310  in Top Frontier Investment on December 30, 2024 and sell it today you would lose (310.00) from holding Top Frontier Investment or give up 4.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.55%
Values	Daily Returns

GT Capital Holdings  vs.  Top Frontier Investment

GT Capital Holdings

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Top Frontier Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Top Frontier Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Top Frontier is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GT Capital and Top Frontier

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

The idea behind GT Capital Holdings and Top Frontier Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.