Correlation Between Bright Kindle and GT Capital

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

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

Diversification Opportunities for Bright Kindle and GT Capital

-0.7

Correlation Coefficient

Bright Kindle  GT Capital

Excellent diversification

The 3 months correlation between Bright and GTCAP is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bright Kindle Resources 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 Bright Kindle 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 Bright Kindle Resources 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 Bright Kindle i.e., Bright Kindle and GT Capital go up and down completely randomly.

Pair Corralation between Bright Kindle and GT Capital

Assuming the 90 days trading horizon Bright Kindle Resources is expected to under-perform the GT Capital. In addition to that, Bright Kindle is 1.35 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 0.22 per unit of volatility. If you would invest  47,200  in GT Capital Holdings on April 22, 2025 and sell it today you would earn a total of  18,100  from holding GT Capital Holdings or generate 38.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.8%
Values	Daily Returns

Bright Kindle Resources  vs.  GT Capital Holdings

Bright Kindle Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bright Kindle Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

GT Capital Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GT Capital Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, GT Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bright Kindle and GT Capital

The main advantage of trading using opposite Bright Kindle and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Kindle 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 Bright Kindle Resources 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 CEOs Directory module to screen CEOs from public companies around the world.