Correlation Between GUARANTY TRUST and NOTORE CHEMICAL

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

By analyzing existing cross correlation between GUARANTY TRUST HOLDING and NOTORE CHEMICAL IND, you can compare the effects of market volatilities on GUARANTY TRUST and NOTORE CHEMICAL 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 GUARANTY TRUST with a short position of NOTORE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARANTY TRUST and NOTORE CHEMICAL.

Diversification Opportunities for GUARANTY TRUST and NOTORE CHEMICAL

0.0

Correlation Coefficient

GUARANTY TRUST  NOTORE CHEMICAL

Pay attention - limited upside

The 3 months correlation between GUARANTY and NOTORE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GUARANTY TRUST HOLDING and NOTORE CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOTORE CHEMICAL IND and GUARANTY TRUST 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 GUARANTY TRUST HOLDING are associated (or correlated) with NOTORE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOTORE CHEMICAL IND has no effect on the direction of GUARANTY TRUST i.e., GUARANTY TRUST and NOTORE CHEMICAL go up and down completely randomly.

Pair Corralation between GUARANTY TRUST and NOTORE CHEMICAL

If you would invest  4,515  in GUARANTY TRUST HOLDING on September 29, 2024 and sell it today you would earn a total of  1,280  from holding GUARANTY TRUST HOLDING or generate 28.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

GUARANTY TRUST HOLDING  vs.  NOTORE CHEMICAL IND

GUARANTY TRUST HOLDING

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GUARANTY TRUST HOLDING are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, GUARANTY TRUST displayed solid returns over the last few months and may actually be approaching a breakup point.

NOTORE CHEMICAL IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOTORE CHEMICAL IND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NOTORE CHEMICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GUARANTY TRUST and NOTORE CHEMICAL

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

The idea behind GUARANTY TRUST HOLDING and NOTORE CHEMICAL IND 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.