Correlation Between GT Capital and Century Pacific

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

Diversification Opportunities for GT Capital and Century Pacific

0.54

Correlation Coefficient

GT Capital  Century Pacific

Very weak diversification

The 3 months correlation between GTPPB and Century is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Century Pacific Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Pacific Food 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 Century Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Pacific Food has no effect on the direction of GT Capital i.e., GT Capital and Century Pacific go up and down completely randomly.

Pair Corralation between GT Capital and Century Pacific

Assuming the 90 days trading horizon GT Capital is expected to generate 2.96 times less return on investment than Century Pacific. In addition to that, GT Capital is 1.38 times more volatile than Century Pacific Food. It trades about 0.03 of its total potential returns per unit of risk. Century Pacific Food is currently generating about 0.12 per unit of volatility. If you would invest  3,830  in Century Pacific Food on September 13, 2024 and sell it today you would earn a total of  455.00  from holding Century Pacific Food or generate 11.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	41.27%
Values	Daily Returns

GT Capital Holdings  vs.  Century Pacific Food

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.

Century Pacific Food

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Century Pacific Food are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Century Pacific may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GT Capital and Century Pacific

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

The idea behind GT Capital Holdings and Century Pacific Food 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.