Correlation Between Gulf Energy and Kasikornbank Public
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Kasikornbank Public 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 Kasikornbank Public 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 Kasikornbank Public, you can compare the effects of market volatilities on Gulf Energy and Kasikornbank Public 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 Kasikornbank Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Kasikornbank Public.
Diversification Opportunities for Gulf Energy and Kasikornbank Public
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gulf and Kasikornbank is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank 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 Kasikornbank Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasikornbank Public has no effect on the direction of Gulf Energy i.e., Gulf Energy and Kasikornbank Public go up and down completely randomly.
Pair Corralation between Gulf Energy and Kasikornbank Public
Assuming the 90 days trading horizon Gulf Energy Development is expected to under-perform the Kasikornbank Public. In addition to that, Gulf Energy is 2.24 times more volatile than Kasikornbank Public. It trades about -0.12 of its total potential returns per unit of risk. Kasikornbank Public is currently generating about 0.04 per unit of volatility. If you would invest 14,850 in Kasikornbank Public on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Kasikornbank Public or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gulf Energy Development vs. Kasikornbank Public
Performance |
| Timeline |
| Gulf Energy Development |
| Kasikornbank Public |
Gulf Energy and Kasikornbank Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Kasikornbank Public
The main advantage of trading using opposite Gulf Energy and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Kasikornbank Public 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 Kasikornbank Public will offset losses from the drop in Kasikornbank Public's long position.The idea behind Gulf Energy Development and Kasikornbank Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kasikornbank Public vs. SCB X Public | Kasikornbank Public vs. Bangkok Bank Public | Kasikornbank Public vs. PTT Public | Kasikornbank Public 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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