Correlation Between Gunkul Engineering and Union Petrochemical
Can any of the company-specific risk be diversified away by investing in both Gunkul Engineering and Union Petrochemical 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 Union Petrochemical 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 Union Petrochemical Public, you can compare the effects of market volatilities on Gunkul Engineering and Union Petrochemical 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 Union Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and Union Petrochemical.
Diversification Opportunities for Gunkul Engineering and Union Petrochemical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gunkul and Union is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public and Union Petrochemical Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Petrochemical 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 Union Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Petrochemical has no effect on the direction of Gunkul Engineering i.e., Gunkul Engineering and Union Petrochemical go up and down completely randomly.
Pair Corralation between Gunkul Engineering and Union Petrochemical
Assuming the 90 days trading horizon Gunkul Engineering is expected to generate 1741.2 times less return on investment than Union Petrochemical. But when comparing it to its historical volatility, Gunkul Engineering Public is 34.24 times less risky than Union Petrochemical. It trades about 0.0 of its potential returns per unit of risk. Union Petrochemical Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Union Petrochemical Public on August 29, 2024 and sell it today you would lose (20.00) from holding Union Petrochemical Public or give up 22.73% 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. Union Petrochemical Public
Performance |
| Timeline |
| Gunkul Engineering Public |
| Union Petrochemical |
Gunkul Engineering and Union Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunkul Engineering and Union Petrochemical
The main advantage of trading using opposite Gunkul Engineering and Union Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering position performs unexpectedly, Union Petrochemical 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 Union Petrochemical will offset losses from the drop in Union Petrochemical's long position.| Gunkul Engineering vs. MCS Steel Public | Gunkul Engineering vs. Asia Plus Group | Gunkul Engineering vs. Lalin Property Public | Gunkul Engineering vs. Lam Soon Public |
| Union Petrochemical vs. Vibhavadi Medical Center | Union Petrochemical vs. TWZ Public | Union Petrochemical vs. WHA Public | Union Petrochemical vs. Tata Steel 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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