Correlation Between Cgrowth Capital and Gulf Keystone
Can any of the company-specific risk be diversified away by investing in both Cgrowth Capital and Gulf Keystone 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 Cgrowth Capital and Gulf Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cgrowth Capital and Gulf Keystone Petroleum, you can compare the effects of market volatilities on Cgrowth Capital and Gulf Keystone 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 Cgrowth Capital with a short position of Gulf Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cgrowth Capital and Gulf Keystone.
Diversification Opportunities for Cgrowth Capital and Gulf Keystone
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cgrowth and Gulf is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cgrowth Capital and Gulf Keystone Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Keystone Petroleum and Cgrowth 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 Cgrowth Capital are associated (or correlated) with Gulf Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Keystone Petroleum has no effect on the direction of Cgrowth Capital i.e., Cgrowth Capital and Gulf Keystone go up and down completely randomly.
Pair Corralation between Cgrowth Capital and Gulf Keystone
Given the investment horizon of 90 days Cgrowth Capital is expected to generate 6.27 times more return on investment than Gulf Keystone. However, Cgrowth Capital is 6.27 times more volatile than Gulf Keystone Petroleum. It trades about 0.14 of its potential returns per unit of risk. Gulf Keystone Petroleum is currently generating about 0.15 per unit of risk. If you would invest 0.20 in Cgrowth Capital on November 3, 2024 and sell it today you would earn a total of 0.04 from holding Cgrowth Capital or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cgrowth Capital vs. Gulf Keystone Petroleum
Performance |
| Timeline |
| Cgrowth Capital |
| Gulf Keystone Petroleum |
Cgrowth Capital and Gulf Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cgrowth Capital and Gulf Keystone
The main advantage of trading using opposite Cgrowth Capital and Gulf Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cgrowth Capital position performs unexpectedly, Gulf Keystone 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 Keystone will offset losses from the drop in Gulf Keystone's long position.| Cgrowth Capital vs. Sound Energy plc | Cgrowth Capital vs. Energy Revenue Amer | Cgrowth Capital vs. Prairie Provident Resources | Cgrowth Capital vs. MMEX Resources Corp |
| Gulf Keystone vs. San Leon Energy | Gulf Keystone vs. Enwell Energy plc | Gulf Keystone vs. Dno ASA | Gulf Keystone vs. Questerre Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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