Correlation Between Gulf Energy and Rojana Industrial
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Rojana Industrial 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 Rojana Industrial 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 Rojana Industrial Park, you can compare the effects of market volatilities on Gulf Energy and Rojana Industrial 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 Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Rojana Industrial.
Diversification Opportunities for Gulf Energy and Rojana Industrial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gulf and Rojana is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park 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 Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of Gulf Energy i.e., Gulf Energy and Rojana Industrial go up and down completely randomly.
Pair Corralation between Gulf Energy and Rojana Industrial
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 1.39 times more return on investment than Rojana Industrial. However, Gulf Energy is 1.39 times more volatile than Rojana Industrial Park. It trades about 0.03 of its potential returns per unit of risk. Rojana Industrial Park is currently generating about -0.25 per unit of risk. If you would invest 6,375 in Gulf Energy Development on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Gulf Energy Development or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Energy Development vs. Rojana Industrial Park
Performance |
| Timeline |
| Gulf Energy Development |
| Rojana Industrial Park |
Gulf Energy and Rojana Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Rojana Industrial
The main advantage of trading using opposite Gulf Energy and Rojana Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Rojana Industrial 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 Rojana Industrial will offset losses from the drop in Rojana Industrial'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 |
| Rojana Industrial vs. PTT Global Chemical | Rojana Industrial vs. Quality Construction Products | Rojana Industrial vs. Bhiraj Office Leasehold | Rojana Industrial vs. Lohakit Metal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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