Correlation Between San Miguel and GT Capital

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

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

Diversification Opportunities for San Miguel and GT Capital

0.82

Correlation Coefficient

San Miguel  GT Capital

Very poor diversification

The 3 months correlation between San and GTCAP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure 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 San Miguel 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 San Miguel Pure 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 San Miguel i.e., San Miguel and GT Capital go up and down completely randomly.

Pair Corralation between San Miguel and GT Capital

Assuming the 90 days trading horizon San Miguel is expected to generate 8.14 times less return on investment than GT Capital. But when comparing it to its historical volatility, San Miguel Pure is 3.1 times less risky than GT Capital. It trades about 0.09 of its potential returns per unit of risk. GT Capital Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  47,000  in GT Capital Holdings on April 21, 2025 and sell it today you would earn a total of  18,300  from holding GT Capital Holdings or generate 38.94% return on investment over 90 days.

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

San Miguel Pure  vs.  GT Capital Holdings

San Miguel Pure

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in San Miguel Pure are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, San Miguel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the 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 uncertain fundamental indicators, GT Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with San Miguel and GT Capital

The main advantage of trading using opposite San Miguel and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel 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 San Miguel Pure 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..