Correlation Between Jay Mart and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Jay Mart and Gulf Energy 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 Jay Mart and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jay Mart Public and Gulf Energy Development, you can compare the effects of market volatilities on Jay Mart and Gulf Energy 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 Jay Mart with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Gulf Energy.
Diversification Opportunities for Jay Mart and Gulf Energy
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jay and Gulf is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Gulf Energy Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Energy Development and Jay Mart 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 Jay Mart Public are associated (or correlated) with Gulf Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Energy Development has no effect on the direction of Jay Mart i.e., Jay Mart and Gulf Energy go up and down completely randomly.
Pair Corralation between Jay Mart and Gulf Energy
Assuming the 90 days trading horizon Jay Mart is expected to generate 2.19 times less return on investment than Gulf Energy. In addition to that, Jay Mart is 2.67 times more volatile than Gulf Energy Development. It trades about 0.04 of its total potential returns per unit of risk. Gulf Energy Development is currently generating about 0.21 per unit of volatility. If you would invest 4,050 in Gulf Energy Development on August 29, 2024 and sell it today you would earn a total of 2,200 from holding Gulf Energy Development or generate 54.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jay Mart Public vs. Gulf Energy Development
Performance |
| Timeline |
| Jay Mart Public |
| Gulf Energy Development |
Jay Mart and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jay Mart and Gulf Energy
The main advantage of trading using opposite Jay Mart and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jay Mart position performs unexpectedly, Gulf Energy 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 Gulf Energy will offset losses from the drop in Gulf Energy's long position.| Jay Mart vs. AP Public | Jay Mart vs. Jasmine International Public | Jay Mart vs. Asia Plus Group | Jay Mart vs. Bangchak Public |
| Gulf Energy vs. WHA Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. TPI Polene Power | Gulf Energy vs. Bangkok Expressway and |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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