Correlation Between Gunkul Engineering and NCL International
Can any of the company-specific risk be diversified away by investing in both Gunkul Engineering and NCL International 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 NCL International 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 NCL International Logistics, you can compare the effects of market volatilities on Gunkul Engineering and NCL International 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 NCL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and NCL International.
Diversification Opportunities for Gunkul Engineering and NCL International
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gunkul and NCL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International 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 NCL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCL International has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and NCL International go up and down completely randomly.
Pair Corralation between Gunkul Engineering and NCL International
Assuming the 90 days trading horizon Gunkul Engineering Public is expected to under-perform the NCL International. But the stock apears to be less risky and, when comparing its historical volatility, Gunkul Engineering Public is 2.25 times less risky than NCL International. The stock trades about -0.34 of its potential returns per unit of risk. The NCL International Logistics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 47.00 in NCL International Logistics on August 29, 2024 and sell it today you would lose (2.00) from holding NCL International Logistics or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunkul Engineering Public vs. NCL International Logistics
Performance |
| Timeline |
| Gunkul Engineering Public |
| NCL International |
Gunkul Engineering and NCL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunkul Engineering and NCL International
The main advantage of trading using opposite Gunkul Engineering and NCL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering position performs unexpectedly, NCL International 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 NCL International will offset losses from the drop in NCL International's long position.| Gunkul Engineering vs. Tata Steel Public | Gunkul Engineering vs. Thaifoods Group Public | Gunkul Engineering vs. TMT Steel Public | Gunkul Engineering vs. The Erawan Group |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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