Correlation Between Gulf Energy and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both Gulf Energy and Bangkok Dusit 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 Gulf Energy and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Energy Development and Bangkok Dusit Medical, you can compare the effects of market volatilities on Gulf Energy and Bangkok Dusit 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 Gulf Energy with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Energy and Bangkok Dusit.
Diversification Opportunities for Gulf Energy and Bangkok Dusit
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gulf and Bangkok is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Energy Development and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and Gulf Energy 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 Gulf Energy Development are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Gulf Energy i.e., Gulf Energy and Bangkok Dusit go up and down completely randomly.
Pair Corralation between Gulf Energy and Bangkok Dusit
Assuming the 90 days trading horizon Gulf Energy Development is expected to under-perform the Bangkok Dusit. In addition to that, Gulf Energy is 2.42 times more volatile than Bangkok Dusit Medical. It trades about -0.09 of its total potential returns per unit of risk. Bangkok Dusit Medical is currently generating about 0.03 per unit of volatility. If you would invest 2,850 in Bangkok Dusit Medical on February 27, 2024 and sell it today you would earn a total of 25.00 from holding Bangkok Dusit Medical or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gulf Energy Development vs. Bangkok Dusit Medical
Performance |
Timeline |
Gulf Energy Development |
Bangkok Dusit Medical |
Gulf Energy and Bangkok Dusit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gulf Energy and Bangkok Dusit
The main advantage of trading using opposite Gulf Energy and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Energy position performs unexpectedly, Bangkok Dusit 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 Bangkok Dusit will offset losses from the drop in Bangkok Dusit's long position.Gulf Energy vs. Kasikornbank Public | Gulf Energy vs. SCB X Public | Gulf Energy vs. Kasikornbank Public | Gulf Energy vs. Kang Yong Electric |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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