Correlation Between Absolute Clean and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Absolute Clean and Gulf Energy 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 Absolute Clean and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Clean Energy and Gulf Energy Development, you can compare the effects of market volatilities on Absolute Clean and Gulf Energy 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 Absolute Clean with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Clean and Gulf Energy.
Diversification Opportunities for Absolute Clean and Gulf Energy
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Absolute and Gulf is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Clean Energy and Gulf Energy Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Energy Development and Absolute Clean 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 Absolute Clean Energy are associated (or correlated) with Gulf Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Energy Development has no effect on the direction of Absolute Clean i.e., Absolute Clean and Gulf Energy go up and down completely randomly.
Pair Corralation between Absolute Clean and Gulf Energy
Assuming the 90 days trading horizon Absolute Clean Energy is expected to generate 28.86 times more return on investment than Gulf Energy. However, Absolute Clean is 28.86 times more volatile than Gulf Energy Development. It trades about 0.04 of its potential returns per unit of risk. Gulf Energy Development is currently generating about 0.03 per unit of risk. If you would invest 256.00 in Absolute Clean Energy on September 13, 2024 and sell it today you would lose (125.00) from holding Absolute Clean Energy or give up 48.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Clean Energy vs. Gulf Energy Development
Performance |
| Timeline |
| Absolute Clean Energy |
| Gulf Energy Development |
Absolute Clean and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Clean and Gulf Energy
The main advantage of trading using opposite Absolute Clean and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Clean position performs unexpectedly, Gulf Energy 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 Gulf Energy will offset losses from the drop in Gulf Energy's long position.| Absolute Clean vs. BCPG Public | Absolute Clean vs. Energy Absolute Public | Absolute Clean vs. Gunkul Engineering Public | Absolute Clean vs. Gulf Energy Development |
| Gulf Energy vs. Energy Absolute Public | Gulf Energy vs. BGrimm Power Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. CP ALL Public |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |