Correlation Between Gulf Energy and Global Power
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Global 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 Global 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 Global Power Synergy, you can compare the effects of market volatilities on Gulf Energy and Global 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 Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Global Power.
Diversification Opportunities for Gulf Energy and Global Power
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gulf and Global is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy 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 Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of Gulf Energy i.e., Gulf Energy and Global Power go up and down completely randomly.
Pair Corralation between Gulf Energy and Global Power
Assuming the 90 days trading horizon Gulf Energy Development is expected to under-perform the Global Power. But the stock apears to be less risky and, when comparing its historical volatility, Gulf Energy Development is 1.01 times less risky than Global Power. The stock trades about -0.09 of its potential returns per unit of risk. The Global Power Synergy is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,425 in Global Power Synergy on August 29, 2024 and sell it today you would lose (50.00) from holding Global Power Synergy or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Energy Development vs. Global Power Synergy
Performance |
| Timeline |
| Gulf Energy Development |
| Global Power Synergy |
Gulf Energy and Global Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Global Power
The main advantage of trading using opposite Gulf Energy and Global Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Global 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 Global Power will offset losses from the drop in Global Power'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 |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |