Correlation Between Electricity Generating and BGrimm Power
Can any of the company-specific risk be diversified away by investing in both Electricity Generating and BGrimm Power 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 Electricity Generating and BGrimm Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electricity Generating Public and BGrimm Power Public, you can compare the effects of market volatilities on Electricity Generating and BGrimm Power 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 Electricity Generating with a short position of BGrimm Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricity Generating and BGrimm Power.
Diversification Opportunities for Electricity Generating and BGrimm Power
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electricity and BGrimm is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Electricity Generating Public and BGrimm Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGrimm Power Public and Electricity Generating 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 Electricity Generating Public are associated (or correlated) with BGrimm Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGrimm Power Public has no effect on the direction of Electricity Generating i.e., Electricity Generating and BGrimm Power go up and down completely randomly.
Pair Corralation between Electricity Generating and BGrimm Power
Assuming the 90 days trading horizon Electricity Generating Public is expected to generate 0.73 times more return on investment than BGrimm Power. However, Electricity Generating Public is 1.37 times less risky than BGrimm Power. It trades about 0.02 of its potential returns per unit of risk. BGrimm Power Public is currently generating about -0.03 per unit of risk. If you would invest 11,987 in Electricity Generating Public on September 14, 2024 and sell it today you would earn a total of 363.00 from holding Electricity Generating Public or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electricity Generating Public vs. BGrimm Power Public
Performance |
| Timeline |
| Electricity Generating |
| BGrimm Power Public |
Electricity Generating and BGrimm Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricity Generating and BGrimm Power
The main advantage of trading using opposite Electricity Generating and BGrimm Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricity Generating position performs unexpectedly, BGrimm Power 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 BGrimm Power will offset losses from the drop in BGrimm Power's long position.| Electricity Generating vs. The Siam Cement | Electricity Generating vs. CP ALL Public | Electricity Generating vs. Intouch Holdings Public | Electricity Generating vs. PTT Public |
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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 Stocks Directory module to find actively traded stocks across global markets.
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