Correlation Between GT Capital and Monde Nissin

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

Diversification Opportunities for GT Capital and Monde Nissin

0.55

Correlation Coefficient

GT Capital  Monde Nissin

Very weak diversification

The 3 months correlation between GTPPB and Monde is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp 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 Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of GT Capital i.e., GT Capital and Monde Nissin go up and down completely randomly.

Pair Corralation between GT Capital and Monde Nissin

Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 0.43 times more return on investment than Monde Nissin. However, GT Capital Holdings is 2.34 times less risky than Monde Nissin. It trades about 0.05 of its potential returns per unit of risk. Monde Nissin Corp is currently generating about -0.22 per unit of risk. If you would invest  97,726  in GT Capital Holdings on October 20, 2024 and sell it today you would earn a total of  1,674  from holding GT Capital Holdings or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.54%
Values	Daily Returns

GT Capital Holdings  vs.  Monde Nissin Corp

GT Capital Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GT Capital Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, GT Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Monde Nissin Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monde Nissin Corp 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 basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with GT Capital and Monde Nissin

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

The idea behind GT Capital Holdings and Monde Nissin Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.