Correlation Between GT Capital and VistaREIT

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

Diversification Opportunities for GT Capital and VistaREIT

0.02

Correlation Coefficient

GT Capital  VistaREIT

Significant diversification

The 3 months correlation between GTCAP and VistaREIT is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and VistaREIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VistaREIT 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 VistaREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VistaREIT has no effect on the direction of GT Capital i.e., GT Capital and VistaREIT go up and down completely randomly.

Pair Corralation between GT Capital and VistaREIT

Assuming the 90 days trading horizon GT Capital is expected to generate 2.16 times less return on investment than VistaREIT. In addition to that, GT Capital is 2.47 times more volatile than VistaREIT. It trades about 0.03 of its total potential returns per unit of risk. VistaREIT is currently generating about 0.14 per unit of volatility. If you would invest  173.00  in VistaREIT on September 5, 2024 and sell it today you would earn a total of  12.00  from holding VistaREIT or generate 6.94% return on investment over 90 days.

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

GT Capital Holdings  vs.  VistaREIT

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 fundamental 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.

VistaREIT

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VistaREIT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, VistaREIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GT Capital and VistaREIT

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

The idea behind GT Capital Holdings and VistaREIT 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.