Correlation Between Gulf Energy and Thai Life
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Thai Life 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 Thai Life 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 Thai Life Insurance, you can compare the effects of market volatilities on Gulf Energy and Thai Life 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 Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Thai Life.
Diversification Opportunities for Gulf Energy and Thai Life
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gulf and Thai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Thai Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Life Insurance 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 Thai Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Life Insurance has no effect on the direction of Gulf Energy i.e., Gulf Energy and Thai Life go up and down completely randomly.
Pair Corralation between Gulf Energy and Thai Life
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 0.73 times more return on investment than Thai Life. However, Gulf Energy Development is 1.37 times less risky than Thai Life. It trades about 0.09 of its potential returns per unit of risk. Thai Life Insurance is currently generating about 0.06 per unit of risk. If you would invest 4,460 in Gulf Energy Development on September 3, 2024 and sell it today you would earn a total of 1,665 from holding Gulf Energy Development or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Energy Development vs. Thai Life Insurance
Performance |
| Timeline |
| Gulf Energy Development |
| Thai Life Insurance |
Gulf Energy and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and Thai Life
The main advantage of trading using opposite Gulf Energy and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Thai Life 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 Thai Life will offset losses from the drop in Thai Life'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 |
| Thai Life vs. Bangkok Life Assurance | Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. Muangthai Capital 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |