Correlation Between SERI INDUSTRIAL and GPT

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

By analyzing existing cross correlation between SERI INDUSTRIAL EO and GPT Group, you can compare the effects of market volatilities on SERI INDUSTRIAL and GPT 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 SERI INDUSTRIAL with a short position of GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and GPT.

Diversification Opportunities for SERI INDUSTRIAL and GPT

0.22

Correlation Coefficient

SERI INDUSTRIAL  GPT

Modest diversification

The 3 months correlation between SERI and GPT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and GPT go up and down completely randomly.

Pair Corralation between SERI INDUSTRIAL and GPT

Assuming the 90 days trading horizon SERI INDUSTRIAL is expected to generate 1.19 times less return on investment than GPT. In addition to that, SERI INDUSTRIAL is 1.87 times more volatile than GPT Group. It trades about 0.05 of its total potential returns per unit of risk. GPT Group is currently generating about 0.12 per unit of volatility. If you would invest  240.00  in GPT Group on April 23, 2025 and sell it today you would earn a total of  39.00  from holding GPT Group or generate 16.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SERI INDUSTRIAL EO  vs.  GPT Group

SERI INDUSTRIAL EO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SERI INDUSTRIAL EO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, SERI INDUSTRIAL reported solid returns over the last few months and may actually be approaching a breakup point.

GPT Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GPT Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GPT reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SERI INDUSTRIAL and GPT

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

The idea behind SERI INDUSTRIAL EO and GPT 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.