Correlation Between Gulf Energy and BGrimm Power
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and BGrimm Power 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 BGrimm Power 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 BGrimm Power Public, you can compare the effects of market volatilities on Gulf Energy and BGrimm Power 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 BGrimm Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and BGrimm Power.
Diversification Opportunities for Gulf Energy and BGrimm Power
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gulf and BGrimm is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and BGrimm Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGrimm Power Public 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 BGrimm Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGrimm Power Public has no effect on the direction of Gulf Energy i.e., Gulf Energy and BGrimm Power go up and down completely randomly.
Pair Corralation between Gulf Energy and BGrimm Power
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 1.43 times more return on investment than BGrimm Power. However, Gulf Energy is 1.43 times more volatile than BGrimm Power Public. It trades about -0.1 of its potential returns per unit of risk. BGrimm Power Public is currently generating about -0.25 per unit of risk. If you would invest 6,650 in Gulf Energy Development on August 25, 2024 and sell it today you would lose (250.00) from holding Gulf Energy Development or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gulf Energy Development vs. BGrimm Power Public
Performance |
| Timeline |
| Gulf Energy Development |
| BGrimm Power Public |
Gulf Energy and BGrimm Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and BGrimm Power
The main advantage of trading using opposite Gulf Energy and BGrimm Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, BGrimm Power 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 BGrimm Power will offset losses from the drop in BGrimm Power's long position.| Gulf Energy vs. WHA Public | Gulf Energy vs. TPI Polene Power | Gulf Energy vs. Bangkok Expressway and | Gulf Energy vs. BGrimm Power Public |
| BGrimm Power vs. Gulf Energy Development | BGrimm Power vs. Global Power Synergy | BGrimm Power vs. Energy Absolute Public | BGrimm Power vs. Bangkok Expressway and |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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