Correlation Between Precious Shipping and Gulf Energy
Can any of the company-specific risk be diversified away by investing in both Precious Shipping 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 Precious Shipping and Gulf Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Shipping Public and Gulf Energy Development, you can compare the effects of market volatilities on Precious Shipping 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 Precious Shipping with a short position of Gulf Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Shipping and Gulf Energy.
Diversification Opportunities for Precious Shipping and Gulf Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Precious and Gulf is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Precious Shipping 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 Precious Shipping 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 Precious Shipping 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 Precious Shipping i.e., Precious Shipping and Gulf Energy go up and down completely randomly.
Pair Corralation between Precious Shipping and Gulf Energy
Assuming the 90 days trading horizon Precious Shipping is expected to generate 31.57 times less return on investment than Gulf Energy. In addition to that, Precious Shipping is 1.6 times more volatile than Gulf Energy Development. It trades about 0.0 of its total potential returns per unit of risk. Gulf Energy Development is currently generating about 0.09 per unit of volatility. If you would invest 4,460 in Gulf Energy Development on September 2, 2024 and sell it today you would earn a total of 1,590 from holding Gulf Energy Development or generate 35.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Shipping Public vs. Gulf Energy Development
Performance |
| Timeline |
| Precious Shipping Public |
| Gulf Energy Development |
Precious Shipping and Gulf Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Shipping and Gulf Energy
The main advantage of trading using opposite Precious Shipping and Gulf Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Shipping 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.| Precious Shipping vs. Gulf Energy Development | Precious Shipping vs. Energy Absolute Public | Precious Shipping vs. WHA Public | Precious Shipping 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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