Correlation Between Krungthai Car and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Krungthai Car 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 Krungthai Car and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krungthai Car Rent and Gulf Energy Development, you can compare the effects of market volatilities on Krungthai Car 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 Krungthai Car with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungthai Car and Gulf Energy.
Diversification Opportunities for Krungthai Car and Gulf Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Krungthai and Gulf is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Car Rent 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 Krungthai Car 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 Krungthai Car Rent 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 Krungthai Car i.e., Krungthai Car and Gulf Energy go up and down completely randomly.
Pair Corralation between Krungthai Car and Gulf Energy
Assuming the 90 days trading horizon Krungthai Car Rent is expected to generate 29.68 times more return on investment than Gulf Energy. However, Krungthai Car is 29.68 times more volatile than Gulf Energy Development. It trades about 0.04 of its potential returns per unit of risk. Gulf Energy Development is currently generating about 0.03 per unit of risk. If you would invest 763.00 in Krungthai Car Rent on September 2, 2024 and sell it today you would lose (291.00) from holding Krungthai Car Rent or give up 38.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krungthai Car Rent vs. Gulf Energy Development
Performance |
| Timeline |
| Krungthai Car Rent |
| Gulf Energy Development |
Krungthai Car and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krungthai Car and Gulf Energy
The main advantage of trading using opposite Krungthai Car and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krungthai Car 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.| Krungthai Car vs. Gulf Energy Development | Krungthai Car vs. Energy Absolute Public | Krungthai Car vs. WHA Public | Krungthai Car vs. Bangkok Expressway and |
| Gulf Energy vs. Energy Absolute Public | Gulf Energy vs. BGrimm Power Public | Gulf Energy vs. Global Power Synergy | Gulf Energy vs. CP ALL 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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