Correlation Between Electricity Generating and GULF ENERGY
Can any of the company-specific risk be diversified away by investing in both Electricity Generating and GULF ENERGY 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 GULF ENERGY 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 GULF ENERGY DEVELOPMENT NVDR, you can compare the effects of market volatilities on Electricity Generating and GULF ENERGY 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 GULF ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricity Generating and GULF ENERGY.
Diversification Opportunities for Electricity Generating and GULF ENERGY
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Electricity and GULF is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Electricity Generating Public and GULF ENERGY DEVELOPMENT NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GULF ENERGY DEVELOPMENT 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 GULF ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GULF ENERGY DEVELOPMENT has no effect on the direction of Electricity Generating i.e., Electricity Generating and GULF ENERGY go up and down completely randomly.
Pair Corralation between Electricity Generating and GULF ENERGY
Assuming the 90 days trading horizon Electricity Generating Public is expected to generate 0.5 times more return on investment than GULF ENERGY. However, Electricity Generating Public is 2.0 times less risky than GULF ENERGY. It trades about -0.31 of its potential returns per unit of risk. GULF ENERGY DEVELOPMENT NVDR is currently generating about -0.19 per unit of risk. If you would invest 11,400 in Electricity Generating Public on November 28, 2024 and sell it today you would lose (1,300) from holding Electricity Generating Public or give up 11.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Electricity Generating Public vs. GULF ENERGY DEVELOPMENT NVDR
Performance |
| Timeline |
| Electricity Generating |
| GULF ENERGY DEVELOPMENT |
Electricity Generating and GULF ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricity Generating and GULF ENERGY
The main advantage of trading using opposite Electricity Generating and GULF ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricity Generating position performs unexpectedly, GULF ENERGY 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 ENERGY will offset losses from the drop in GULF ENERGY'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |