Correlation Between Gunkul Engineering and Eastern Power
Can any of the company-specific risk be diversified away by investing in both Gunkul Engineering and Eastern 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 Gunkul Engineering and Eastern Power 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 Eastern Power Group, you can compare the effects of market volatilities on Gunkul Engineering and Eastern 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 Gunkul Engineering with a short position of Eastern Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and Eastern Power.
Diversification Opportunities for Gunkul Engineering and Eastern Power
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gunkul and Eastern is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and Eastern Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Power Group 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 Eastern Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Power Group has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and Eastern Power go up and down completely randomly.
Pair Corralation between Gunkul Engineering and Eastern Power
Assuming the 90 days trading horizon Gunkul Engineering Public is expected to under-perform the Eastern Power. But the stock apears to be less risky and, when comparing its historical volatility, Gunkul Engineering Public is 1.25 times less risky than Eastern Power. The stock trades about -0.26 of its potential returns per unit of risk. The Eastern Power Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Eastern Power Group on September 13, 2024 and sell it today you would lose (12.00) from holding Eastern Power Group or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunkul Engineering Public vs. Eastern Power Group
Performance |
| Timeline |
| Gunkul Engineering Public |
| Eastern Power Group |
Gunkul Engineering and Eastern Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunkul Engineering and Eastern Power
The main advantage of trading using opposite Gunkul Engineering and Eastern Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering position performs unexpectedly, Eastern 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 Eastern Power will offset losses from the drop in Eastern Power'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 |
| Eastern Power vs. BCPG Public | Eastern Power vs. Diamond Building Products | Eastern Power vs. Earth Tech Environment | Eastern Power vs. TPI Polene Power |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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