Correlation Between E For and G Capital
Can any of the company-specific risk be diversified away by investing in both E For and G Capital 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 E For and G Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E for L and G Capital Public, you can compare the effects of market volatilities on E For and G Capital 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 E For with a short position of G Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of E For and G Capital.
Diversification Opportunities for E For and G Capital
Very good diversification
The 3 months correlation between EFORL and GCAP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding E for L and G Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Capital Public and E For 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 E for L are associated (or correlated) with G Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Capital Public has no effect on the direction of E For i.e., E For and G Capital go up and down completely randomly.
Pair Corralation between E For and G Capital
Assuming the 90 days trading horizon E for L is expected to generate 1.82 times more return on investment than G Capital. However, E For is 1.82 times more volatile than G Capital Public. It trades about 0.45 of its potential returns per unit of risk. G Capital Public is currently generating about -0.3 per unit of risk. If you would invest 13.00 in E for L on August 25, 2024 and sell it today you would earn a total of 15.00 from holding E for L or generate 115.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E for L vs. G Capital Public
Performance |
| Timeline |
| E for L |
| G Capital Public |
E For and G Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E For and G Capital
The main advantage of trading using opposite E For and G Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E For position performs unexpectedly, G Capital 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 G Capital will offset losses from the drop in G Capital's long position.The idea behind E for L and G Capital Public 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.| G Capital vs. Amanah Leasing Public | G Capital vs. Muangthai Capital Public | G Capital vs. Infraset Public | G Capital vs. JMT Network Services |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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