Correlation Between GUARANTY TRUST and UNION HOMES

Can any of the company-specific risk be diversified away by investing in both GUARANTY TRUST and UNION HOMES 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 UNION HOMES 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 UNION HOMES SAVINGS, you can compare the effects of market volatilities on GUARANTY TRUST and UNION HOMES 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 UNION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARANTY TRUST and UNION HOMES.

Diversification Opportunities for GUARANTY TRUST and UNION HOMES

0.0

Correlation Coefficient

GUARANTY TRUST  UNION HOMES

Pay attention - limited upside

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

Pair Corralation between GUARANTY TRUST and UNION HOMES

If you would invest  4,800  in GUARANTY TRUST HOLDING on September 29, 2024 and sell it today you would earn a total of  995.00  from holding GUARANTY TRUST HOLDING or generate 20.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

GUARANTY TRUST HOLDING  vs.  UNION HOMES SAVINGS

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.

UNION HOMES SAVINGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNION HOMES SAVINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, UNION HOMES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GUARANTY TRUST and UNION HOMES

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

The idea behind GUARANTY TRUST HOLDING and UNION HOMES SAVINGS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.