Correlation Between Gulf Energy and Pylon Public
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Pylon 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 Pylon 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 Pylon Public, you can compare the effects of market volatilities on Gulf Energy and Pylon 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 Pylon Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Pylon Public.
Diversification Opportunities for Gulf Energy and Pylon Public
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gulf and Pylon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Pylon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pylon 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 Pylon Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pylon Public has no effect on the direction of Gulf Energy i.e., Gulf Energy and Pylon Public go up and down completely randomly.
Pair Corralation between Gulf Energy and Pylon Public
Assuming the 90 days trading horizon Gulf Energy is expected to generate 24.12 times less return on investment than Pylon Public. But when comparing it to its historical volatility, Gulf Energy Development is 41.92 times less risky than Pylon Public. It trades about 0.1 of its potential returns per unit of risk. Pylon Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Pylon Public on September 3, 2024 and sell it today you would lose (63.00) from holding Pylon Public or give up 24.71% 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. Pylon Public
Performance |
| Timeline |
| Gulf Energy Development |
| Pylon Public |
Gulf Energy and Pylon Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Pylon Public
The main advantage of trading using opposite Gulf Energy and Pylon Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Pylon 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 Pylon Public will offset losses from the drop in Pylon Public'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 |
| Pylon Public vs. Seafco Public | Pylon Public vs. PTG Energy PCL | Pylon Public vs. CH Karnchang Public | Pylon Public vs. Ratchthani Leasing 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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