Correlation Between GT Capital and Puregold Price

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

Diversification Opportunities for GT Capital and Puregold Price

0.48

Correlation Coefficient

GT Capital  Puregold Price

Very weak diversification

The 3 months correlation between GTCAP and Puregold is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club 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 Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of GT Capital i.e., GT Capital and Puregold Price go up and down completely randomly.

Pair Corralation between GT Capital and Puregold Price

Assuming the 90 days trading horizon GT Capital Holdings is expected to under-perform the Puregold Price. But the stock apears to be less risky and, when comparing its historical volatility, GT Capital Holdings is 1.19 times less risky than Puregold Price. The stock trades about -0.08 of its potential returns per unit of risk. The Puregold Price Club is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,900  in Puregold Price Club on September 13, 2024 and sell it today you would earn a total of  145.00  from holding Puregold Price Club or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GT Capital Holdings  vs.  Puregold Price Club

GT Capital Holdings

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Puregold Price Club

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with GT Capital and Puregold Price

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

The idea behind GT Capital Holdings and Puregold Price Club 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.