Correlation Between Fine Metal and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Fine Metal 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 Fine Metal and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Metal Technologies and Gulf Energy Development, you can compare the effects of market volatilities on Fine Metal 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 Fine Metal with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Metal and Gulf Energy.
Diversification Opportunities for Fine Metal and Gulf Energy
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fine and Gulf is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fine Metal Technologies and Gulf Energy Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Energy Development and Fine Metal 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 Fine Metal Technologies 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 Fine Metal i.e., Fine Metal and Gulf Energy go up and down completely randomly.
Pair Corralation between Fine Metal and Gulf Energy
Assuming the 90 days trading horizon Fine Metal Technologies is expected to generate 29.93 times more return on investment than Gulf Energy. However, Fine Metal is 29.93 times more volatile than Gulf Energy Development. It trades about 0.04 of its potential returns per unit of risk. Gulf Energy Development is currently generating about 0.03 per unit of risk. If you would invest 2,729 in Fine Metal Technologies on September 3, 2024 and sell it today you would earn a total of 596.00 from holding Fine Metal Technologies or generate 21.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Metal Technologies vs. Gulf Energy Development
Performance |
| Timeline |
| Fine Metal Technologies |
| Gulf Energy Development |
Fine Metal and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Metal and Gulf Energy
The main advantage of trading using opposite Fine Metal and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Metal 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.| Fine Metal vs. GFPT Public | Fine Metal vs. Kulthorn Kirby Public | Fine Metal vs. Chumporn Palm Oil | Fine Metal vs. Haad Thip Public |
| Gulf Energy vs. Energy Absolute Public | Gulf Energy vs. BGrimm Power Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. CP ALL 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |