Correlation Between Nex Point and GULF ENERGY
Can any of the company-specific risk be diversified away by investing in both Nex Point 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 Nex Point and GULF ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nex Point Public and GULF ENERGY DEVELOPMENT NVDR, you can compare the effects of market volatilities on Nex Point 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 Nex Point with a short position of GULF ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nex Point and GULF ENERGY.
Diversification Opportunities for Nex Point and GULF ENERGY
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nex and GULF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nex Point Public and GULF ENERGY DEVELOPMENT NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GULF ENERGY DEVELOPMENT and Nex Point 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 Nex Point 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 Nex Point i.e., Nex Point and GULF ENERGY go up and down completely randomly.
Pair Corralation between Nex Point and GULF ENERGY
Assuming the 90 days trading horizon Nex Point Public is expected to generate 32.97 times more return on investment than GULF ENERGY. However, Nex Point is 32.97 times more volatile than GULF ENERGY DEVELOPMENT NVDR. It trades about 0.07 of its potential returns per unit of risk. GULF ENERGY DEVELOPMENT NVDR is currently generating about 0.08 per unit of risk. If you would invest 262.00 in Nex Point Public on September 2, 2024 and sell it today you would lose (178.00) from holding Nex Point Public or give up 67.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nex Point Public vs. GULF ENERGY DEVELOPMENT NVDR
Performance |
| Timeline |
| Nex Point Public |
| GULF ENERGY DEVELOPMENT |
Nex Point and GULF ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nex Point and GULF ENERGY
The main advantage of trading using opposite Nex Point and GULF ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nex Point 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.| Nex Point vs. Jay Mart Public | Nex Point vs. KCE Electronics Public | Nex Point vs. Hana Microelectronics Public | Nex Point vs. Energy Absolute Public |
| GULF ENERGY vs. Thai Oil Public | GULF ENERGY vs. Electricity Generating Public | GULF ENERGY vs. Ratch Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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