Correlation Between CK Power and Gunkul Engineering
Can any of the company-specific risk be diversified away by investing in both CK Power and Gunkul Engineering 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 CK Power and Gunkul Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and Gunkul Engineering Public, you can compare the effects of market volatilities on CK Power and Gunkul Engineering 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 CK Power with a short position of Gunkul Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Gunkul Engineering.
Diversification Opportunities for CK Power and Gunkul Engineering
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CKP and Gunkul is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Gunkul Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunkul Engineering Public and CK Power 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 CK Power Public are associated (or correlated) with Gunkul Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunkul Engineering Public has no effect on the direction of CK Power i.e., CK Power and Gunkul Engineering go up and down completely randomly.
Pair Corralation between CK Power and Gunkul Engineering
Assuming the 90 days trading horizon CK Power Public is expected to generate 0.8 times more return on investment than Gunkul Engineering. However, CK Power Public is 1.25 times less risky than Gunkul Engineering. It trades about -0.18 of its potential returns per unit of risk. Gunkul Engineering Public is currently generating about -0.33 per unit of risk. If you would invest 364.00 in CK Power Public on August 29, 2024 and sell it today you would lose (26.00) from holding CK Power Public or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. Gunkul Engineering Public
Performance |
| Timeline |
| CK Power Public |
| Gunkul Engineering Public |
CK Power and Gunkul Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Gunkul Engineering
The main advantage of trading using opposite CK Power and Gunkul Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Gunkul Engineering 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 Gunkul Engineering will offset losses from the drop in Gunkul Engineering's long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
| Gunkul Engineering vs. MCS Steel Public | Gunkul Engineering vs. Asia Plus Group | Gunkul Engineering vs. Lalin Property Public | Gunkul Engineering vs. Lam Soon 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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