Correlation Between Gunkul Engineering and Central Plaza
Can any of the company-specific risk be diversified away by investing in both Gunkul Engineering and Central Plaza 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 Gunkul Engineering and Central Plaza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gunkul Engineering Public and Central Plaza Hotel, you can compare the effects of market volatilities on Gunkul Engineering and Central Plaza 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 Gunkul Engineering with a short position of Central Plaza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and Central Plaza.
Diversification Opportunities for Gunkul Engineering and Central Plaza
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gunkul and Central is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and Central Plaza Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Plaza Hotel and Gunkul Engineering 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 Gunkul Engineering Public are associated (or correlated) with Central Plaza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Plaza Hotel has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and Central Plaza go up and down completely randomly.
Pair Corralation between Gunkul Engineering and Central Plaza
Assuming the 90 days trading horizon Gunkul Engineering Public is expected to under-perform the Central Plaza. In addition to that, Gunkul Engineering is 1.21 times more volatile than Central Plaza Hotel. It trades about -0.06 of its total potential returns per unit of risk. Central Plaza Hotel is currently generating about -0.02 per unit of volatility. If you would invest 4,754 in Central Plaza Hotel on September 3, 2024 and sell it today you would lose (979.00) from holding Central Plaza Hotel or give up 20.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunkul Engineering Public vs. Central Plaza Hotel
Performance |
| Timeline |
| Gunkul Engineering Public |
| Central Plaza Hotel |
Gunkul Engineering and Central Plaza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunkul Engineering and Central Plaza
The main advantage of trading using opposite Gunkul Engineering and Central Plaza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering position performs unexpectedly, Central Plaza 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 Central Plaza will offset losses from the drop in Central Plaza's long position.| Gunkul Engineering vs. Gulf Energy Development | Gunkul Engineering vs. Energy Absolute Public | Gunkul Engineering vs. Banpu Public | Gunkul Engineering vs. WHA Public |
| Central Plaza vs. Central Pattana Public | Central Plaza vs. CP ALL Public | Central Plaza vs. Bangkok Dusit Medical | Central Plaza vs. Airports of Thailand |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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