Correlation Between GMA Network and Bank of Commerce

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

By analyzing existing cross correlation between GMA Network and Bank of Commerce, you can compare the effects of market volatilities on GMA Network and Bank of Commerce 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 GMA Network with a short position of Bank of Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMA Network and Bank of Commerce.

Diversification Opportunities for GMA Network and Bank of Commerce

-0.61

Correlation Coefficient

GMA Network  Bank of Commerce

Excellent diversification

The 3 months correlation between GMA and Bank is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GMA Network and Bank of Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Commerce and GMA Network 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 GMA Network are associated (or correlated) with Bank of Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Commerce has no effect on the direction of GMA Network i.e., GMA Network and Bank of Commerce go up and down completely randomly.

Pair Corralation between GMA Network and Bank of Commerce

Assuming the 90 days trading horizon GMA Network is expected to under-perform the Bank of Commerce. But the stock apears to be less risky and, when comparing its historical volatility, GMA Network is 2.1 times less risky than Bank of Commerce. The stock trades about -0.24 of its potential returns per unit of risk. The Bank of Commerce is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Bank of Commerce on April 25, 2025 and sell it today you would earn a total of  16.00  from holding Bank of Commerce or generate 2.29% return on investment over 90 days.

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

GMA Network  vs.  Bank of Commerce

GMA Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMA Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bank of Commerce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Commerce are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Bank of Commerce is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GMA Network and Bank of Commerce

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

The idea behind GMA Network and Bank of Commerce 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.