Correlation Between GT Capital and COL Financial

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

Diversification Opportunities for GT Capital and COL Financial

-0.75

Correlation Coefficient

GT Capital  COL Financial

Pay attention - limited upside

The 3 months correlation between GTCAP and COL is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group 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 COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of GT Capital i.e., GT Capital and COL Financial go up and down completely randomly.

Pair Corralation between GT Capital and COL Financial

Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 1.1 times more return on investment than COL Financial. However, GT Capital is 1.1 times more volatile than COL Financial Group. It trades about 0.22 of its potential returns per unit of risk. COL Financial Group is currently generating about -0.04 per unit of risk. If you would invest  47,000  in GT Capital Holdings on April 20, 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 Against
Strength	Weak
Accuracy	93.55%
Values	Daily Returns

GT Capital Holdings  vs.  COL Financial Group

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.

COL Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days COL Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, COL Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GT Capital and COL Financial

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

The idea behind GT Capital Holdings and COL Financial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.