Correlation Between CVB Financial and GPT

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

By analyzing existing cross correlation between CVB Financial Corp and GPT Group, you can compare the effects of market volatilities on CVB Financial and GPT 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 CVB Financial with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVB Financial and GPT.

Diversification Opportunities for CVB Financial and GPT

0.34

Correlation Coefficient

CVB Financial  GPT

Weak diversification

The 3 months correlation between CVB and GPT is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CVB Financial Corp and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and CVB Financial 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 CVB Financial Corp are associated (or correlated) with GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of CVB Financial i.e., CVB Financial and GPT go up and down completely randomly.

Pair Corralation between CVB Financial and GPT

Assuming the 90 days horizon CVB Financial is expected to generate 1.28 times less return on investment than GPT. But when comparing it to its historical volatility, CVB Financial Corp is 1.46 times less risky than GPT. It trades about 0.14 of its potential returns per unit of risk. GPT Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  240.00  in GPT Group on April 23, 2025 and sell it today you would earn a total of  39.00  from holding GPT Group or generate 16.25% return on investment over 90 days.

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

CVB Financial Corp  vs.  GPT Group

CVB Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CVB Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CVB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

GPT Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GPT Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GPT reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVB Financial and GPT

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

The idea behind CVB Financial Corp and GPT Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.