Correlation Between Gulf Energy and Bangkok Aviation
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Bangkok Aviation 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 Gulf Energy and Bangkok Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Energy Development and Bangkok Aviation Fuel, you can compare the effects of market volatilities on Gulf Energy and Bangkok Aviation 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 Gulf Energy with a short position of Bangkok Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Bangkok Aviation.
Diversification Opportunities for Gulf Energy and Bangkok Aviation
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gulf and Bangkok is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Bangkok Aviation Fuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Aviation Fuel and Gulf Energy 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 Gulf Energy Development are associated (or correlated) with Bangkok Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Aviation Fuel has no effect on the direction of Gulf Energy i.e., Gulf Energy and Bangkok Aviation go up and down completely randomly.
Pair Corralation between Gulf Energy and Bangkok Aviation
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 0.8 times more return on investment than Bangkok Aviation. However, Gulf Energy Development is 1.24 times less risky than Bangkok Aviation. It trades about 0.15 of its potential returns per unit of risk. Bangkok Aviation Fuel is currently generating about -0.07 per unit of risk. If you would invest 5,075 in Gulf Energy Development on September 3, 2024 and sell it today you would earn a total of 975.00 from holding Gulf Energy Development or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Energy Development vs. Bangkok Aviation Fuel
Performance |
| Timeline |
| Gulf Energy Development |
| Bangkok Aviation Fuel |
Gulf Energy and Bangkok Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Bangkok Aviation
The main advantage of trading using opposite Gulf Energy and Bangkok Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Bangkok Aviation 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 Bangkok Aviation will offset losses from the drop in Bangkok Aviation's long position.| Gulf Energy vs. Energy Absolute Public | Gulf Energy vs. BGrimm Power Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. CP ALL Public |
| Bangkok Aviation vs. Bangchak Public | Bangkok Aviation vs. Airports of Thailand | Bangkok Aviation vs. AP Public | Bangkok Aviation vs. Central Pattana 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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