Correlation Between Gulf Energy and VGI Public
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and VGI 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 VGI 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 VGI Public, you can compare the effects of market volatilities on Gulf Energy and VGI 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 VGI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and VGI Public.
Diversification Opportunities for Gulf Energy and VGI Public
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gulf and VGI is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI 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 VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of Gulf Energy i.e., Gulf Energy and VGI Public go up and down completely randomly.
Pair Corralation between Gulf Energy and VGI Public
Assuming the 90 days trading horizon Gulf Energy Development is expected to generate 0.42 times more return on investment than VGI Public. However, Gulf Energy Development is 2.37 times less risky than VGI Public. It trades about 0.06 of its potential returns per unit of risk. VGI Public is currently generating about -0.17 per unit of risk. If you would invest 5,675 in Gulf Energy Development on November 3, 2024 and sell it today you would earn a total of 100.00 from holding Gulf Energy Development or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gulf Energy Development vs. VGI Public
Performance |
| Timeline |
| Gulf Energy Development |
| VGI Public |
Gulf Energy and VGI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Energy and VGI Public
The main advantage of trading using opposite Gulf Energy and VGI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, VGI 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 VGI Public will offset losses from the drop in VGI 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 |
| VGI Public vs. BTS Group Holdings | VGI Public vs. WHA Public | VGI Public vs. Plan B Media | VGI Public 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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