Correlation Between GMM Grammy and Univanich Palm
Can any of the company-specific risk be diversified away by investing in both GMM Grammy and Univanich Palm 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 GMM Grammy and Univanich Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMM Grammy Public and Univanich Palm Oil, you can compare the effects of market volatilities on GMM Grammy and Univanich Palm 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 GMM Grammy with a short position of Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMM Grammy and Univanich Palm.
Diversification Opportunities for GMM Grammy and Univanich Palm
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMM and Univanich is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GMM Grammy Public and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil and GMM Grammy 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 GMM Grammy Public are associated (or correlated) with Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of GMM Grammy i.e., GMM Grammy and Univanich Palm go up and down completely randomly.
Pair Corralation between GMM Grammy and Univanich Palm
Assuming the 90 days trading horizon GMM Grammy Public is expected to generate 1.6 times more return on investment than Univanich Palm. However, GMM Grammy is 1.6 times more volatile than Univanich Palm Oil. It trades about 0.12 of its potential returns per unit of risk. Univanich Palm Oil is currently generating about 0.16 per unit of risk. If you would invest 725.00 in GMM Grammy Public on August 31, 2024 and sell it today you would earn a total of 80.00 from holding GMM Grammy Public or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMM Grammy Public vs. Univanich Palm Oil
Performance |
| Timeline |
| GMM Grammy Public |
| Univanich Palm Oil |
GMM Grammy and Univanich Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMM Grammy and Univanich Palm
The main advantage of trading using opposite GMM Grammy and Univanich Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMM Grammy position performs unexpectedly, Univanich Palm 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 Univanich Palm will offset losses from the drop in Univanich Palm's long position.| GMM Grammy vs. Warrix Sport PCL | GMM Grammy vs. PINTHONG INDUSTRIAL PARK | GMM Grammy vs. Exotic Food Public | GMM Grammy vs. WHA Industrial Leasehold |
| Univanich Palm vs. Chumporn Palm Oil | Univanich Palm vs. Thai Vegetable Oil | Univanich Palm vs. Sri Trang Agro Industry | Univanich Palm vs. Thoresen Thai Agencies |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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