Correlation Between Nawarat Patanakarn and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Nawarat Patanakarn 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 Nawarat Patanakarn and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nawarat Patanakarn Public and Gulf Energy Development, you can compare the effects of market volatilities on Nawarat Patanakarn 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 Nawarat Patanakarn with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nawarat Patanakarn and Gulf Energy.
Diversification Opportunities for Nawarat Patanakarn and Gulf Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nawarat and Gulf is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nawarat Patanakarn 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 Nawarat Patanakarn 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 Nawarat Patanakarn 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 Nawarat Patanakarn i.e., Nawarat Patanakarn and Gulf Energy go up and down completely randomly.
Pair Corralation between Nawarat Patanakarn and Gulf Energy
Assuming the 90 days trading horizon Nawarat Patanakarn Public is expected to under-perform the Gulf Energy. In addition to that, Nawarat Patanakarn is 2.04 times more volatile than Gulf Energy Development. It trades about -0.31 of its total potential returns per unit of risk. Gulf Energy Development is currently generating about -0.24 per unit of volatility. If you would invest 6,650 in Gulf Energy Development on September 3, 2024 and sell it today you would lose (600.00) from holding Gulf Energy Development or give up 9.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nawarat Patanakarn Public vs. Gulf Energy Development
Performance |
| Timeline |
| Nawarat Patanakarn Public |
| Gulf Energy Development |
Nawarat Patanakarn and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nawarat Patanakarn and Gulf Energy
The main advantage of trading using opposite Nawarat Patanakarn and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawarat Patanakarn 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.| Nawarat Patanakarn vs. Asia Aviation Public | Nawarat Patanakarn vs. Bangkok Dusit Medical | Nawarat Patanakarn vs. Bangkok Expressway and | Nawarat Patanakarn vs. Airports of Thailand |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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