Correlation Between Gulf Energy and Syntec Construction
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Syntec Construction 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 Syntec Construction 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 Syntec Construction Public, you can compare the effects of market volatilities on Gulf Energy and Syntec Construction 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 Syntec Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Syntec Construction.
Diversification Opportunities for Gulf Energy and Syntec Construction
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gulf and Syntec is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Syntec Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntec Construction 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 Syntec Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntec Construction has no effect on the direction of Gulf Energy i.e., Gulf Energy and Syntec Construction go up and down completely randomly.
Pair Corralation between Gulf Energy and Syntec Construction
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 1.06 times more return on investment than Syntec Construction. However, Gulf Energy is 1.06 times more volatile than Syntec Construction Public. It trades about 0.03 of its potential returns per unit of risk. Syntec Construction Public is currently generating about 0.01 per unit of risk. If you would invest 5,184 in Gulf Energy Development on September 2, 2024 and sell it today you would earn a total of 866.00 from holding Gulf Energy Development or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Energy Development vs. Syntec Construction Public
Performance |
| Timeline |
| Gulf Energy Development |
| Syntec Construction |
Gulf Energy and Syntec Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Syntec Construction
The main advantage of trading using opposite Gulf Energy and Syntec Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Syntec Construction 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 Syntec Construction will offset losses from the drop in Syntec Construction'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 |
| Syntec Construction vs. Gulf Energy Development | Syntec Construction vs. Energy Absolute Public | Syntec Construction vs. WHA Public | Syntec Construction vs. Bangkok Expressway and |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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