Correlation Between House Of and GT Capital

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

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

Diversification Opportunities for House Of and GT Capital

0.21

Correlation Coefficient

House Of  GT Capital

Modest diversification

The 3 months correlation between House and GTCAP is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding House of Investments and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings and House Of 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 House of Investments are associated (or correlated) with GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of House Of i.e., House Of and GT Capital go up and down completely randomly.

Pair Corralation between House Of and GT Capital

Assuming the 90 days trading horizon House of Investments is expected to generate 1.46 times more return on investment than GT Capital. However, House Of is 1.46 times more volatile than GT Capital Holdings. It trades about 0.0 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.15 per unit of risk. If you would invest  345.00  in House of Investments on December 23, 2024 and sell it today you would lose (5.00) from holding House of Investments or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

House of Investments  vs.  GT Capital Holdings

House of Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days House of Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, House Of is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with House Of and GT Capital

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

The idea behind House of Investments and GT Capital Holdings 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.