Correlation Between Monde Nissin and GT Capital

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

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

Diversification Opportunities for Monde Nissin and GT Capital

-0.61

Correlation Coefficient

Monde Nissin  GT Capital

Excellent diversification

The 3 months correlation between Monde and GTPPB is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Monde Nissin Corp 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 Monde Nissin 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 Monde Nissin Corp 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 Monde Nissin i.e., Monde Nissin and GT Capital go up and down completely randomly.

Pair Corralation between Monde Nissin and GT Capital

Assuming the 90 days trading horizon Monde Nissin Corp is expected to under-perform the GT Capital. In addition to that, Monde Nissin is 1.15 times more volatile than GT Capital Holdings. It trades about -0.12 of its total potential returns per unit of risk. GT Capital Holdings is currently generating about 0.03 per unit of volatility. If you would invest  94,752  in GT Capital Holdings on September 16, 2024 and sell it today you would earn a total of  1,348  from holding GT Capital Holdings or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.54%
Values	Daily Returns

Monde Nissin Corp  vs.  GT Capital Holdings

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

GT Capital Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GT Capital Holdings are ranked lower than 2 (%) 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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Monde Nissin and GT Capital

The main advantage of trading using opposite Monde Nissin and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monde Nissin 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 Monde Nissin Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.