Correlation Between Energy Absolute and BCPG Public
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and BCPG Public 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 Energy Absolute and BCPG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and BCPG Public, you can compare the effects of market volatilities on Energy Absolute and BCPG Public 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 Energy Absolute with a short position of BCPG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and BCPG Public.
Diversification Opportunities for Energy Absolute and BCPG Public
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Energy and BCPG is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and BCPG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCPG Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with BCPG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCPG Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and BCPG Public go up and down completely randomly.
Pair Corralation between Energy Absolute and BCPG Public
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the BCPG Public. In addition to that, Energy Absolute is 1.51 times more volatile than BCPG Public. It trades about -0.18 of its total potential returns per unit of risk. BCPG Public is currently generating about 0.27 per unit of volatility. If you would invest 540.00 in BCPG Public on November 2, 2024 and sell it today you would earn a total of 120.00 from holding BCPG Public or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Absolute Public vs. BCPG Public
Performance |
| Timeline |
| Energy Absolute Public |
| BCPG Public |
Energy Absolute and BCPG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and BCPG Public
The main advantage of trading using opposite Energy Absolute and BCPG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, BCPG Public 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 BCPG Public will offset losses from the drop in BCPG Public's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| BCPG Public vs. Bangchak Public | BCPG Public vs. Gulf Energy Development | BCPG Public vs. Global Power Synergy | BCPG Public vs. Bangkok Expressway and |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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