Correlation Between GT Capital and Rizal Commercial

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

Diversification Opportunities for GT Capital and Rizal Commercial

-0.66

Correlation Coefficient

GT Capital  Rizal Commercial

Excellent diversification

The 3 months correlation between GTCAP and Rizal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GT Capital Holdings and Rizal Commercial Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rizal Commercial Banking 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 Rizal Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rizal Commercial Banking has no effect on the direction of GT Capital i.e., GT Capital and Rizal Commercial go up and down completely randomly.

Pair Corralation between GT Capital and Rizal Commercial

Assuming the 90 days trading horizon GT Capital Holdings is expected to generate 1.69 times more return on investment than Rizal Commercial. However, GT Capital is 1.69 times more volatile than Rizal Commercial Banking. It trades about 0.2 of its potential returns per unit of risk. Rizal Commercial Banking is currently generating about 0.01 per unit of risk. If you would invest  48,580  in GT Capital Holdings on April 24, 2025 and sell it today you would earn a total of  16,420  from holding GT Capital Holdings or generate 33.8% return on investment over 90 days.

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

GT Capital Holdings  vs.  Rizal Commercial Banking

GT Capital Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GT Capital Holdings are ranked lower than 15 (%) 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.

Rizal Commercial Banking

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rizal Commercial Banking are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Rizal Commercial 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 Rizal Commercial

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

The idea behind GT Capital Holdings and Rizal Commercial Banking 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.