Correlation Between GFPT Public and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both GFPT Public and Eastern Commercial 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 GFPT Public and Eastern Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFPT Public and Eastern Commercial Leasing, you can compare the effects of market volatilities on GFPT Public and Eastern Commercial 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 GFPT Public with a short position of Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFPT Public and Eastern Commercial.
Diversification Opportunities for GFPT Public and Eastern Commercial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between GFPT and Eastern is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial and GFPT Public 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 GFPT Public are associated (or correlated) with Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of GFPT Public i.e., GFPT Public and Eastern Commercial go up and down completely randomly.
Pair Corralation between GFPT Public and Eastern Commercial
Assuming the 90 days trading horizon GFPT Public is expected to generate 0.45 times more return on investment than Eastern Commercial. However, GFPT Public is 2.2 times less risky than Eastern Commercial. It trades about -0.41 of its potential returns per unit of risk. Eastern Commercial Leasing is currently generating about -0.33 per unit of risk. If you would invest 1,080 in GFPT Public on October 7, 2024 and sell it today you would lose (110.00) from holding GFPT Public or give up 10.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFPT Public vs. Eastern Commercial Leasing
Performance |
| Timeline |
| GFPT Public |
| Eastern Commercial |
GFPT Public and Eastern Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFPT Public and Eastern Commercial
The main advantage of trading using opposite GFPT Public and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFPT Public position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.| GFPT Public vs. Charoen Pokphand Foods | GFPT Public vs. Hana Microelectronics Public | GFPT Public vs. AP Public | GFPT Public vs. Thai Vegetable Oil |
| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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