Correlation Between Gulf Energy and Sermsang Power
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Sermsang 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 Sermsang 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 Sermsang Power, you can compare the effects of market volatilities on Gulf Energy and Sermsang 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 Sermsang Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Sermsang Power.
Diversification Opportunities for Gulf Energy and Sermsang Power
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gulf and Sermsang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Sermsang Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sermsang Power 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 Sermsang Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sermsang Power has no effect on the direction of Gulf Energy i.e., Gulf Energy and Sermsang Power go up and down completely randomly.
Pair Corralation between Gulf Energy and Sermsang Power
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 1.22 times more return on investment than Sermsang Power. However, Gulf Energy is 1.22 times more volatile than Sermsang Power. It trades about 0.18 of its potential returns per unit of risk. Sermsang Power is currently generating about -0.18 per unit of risk. If you would invest 5,675 in Gulf Energy Development on November 2, 2024 and sell it today you would earn a total of 300.00 from holding Gulf Energy Development or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gulf Energy Development vs. Sermsang Power
Performance |
| Timeline |
| Gulf Energy Development |
| Sermsang Power |
Gulf Energy and Sermsang Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Sermsang Power
The main advantage of trading using opposite Gulf Energy and Sermsang Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Sermsang 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 Sermsang Power will offset losses from the drop in Sermsang 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 |
| Sermsang Power vs. Gunkul Engineering Public | Sermsang Power vs. Energy Absolute Public | Sermsang Power vs. BCPG Public | Sermsang Power vs. Gulf Energy Development |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |