Correlation Between G Capital and BANPU POWER

Can any of the company-specific risk be diversified away by investing in both G Capital and BANPU POWER 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 G Capital and BANPU POWER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Capital Public and BANPU POWER, you can compare the effects of market volatilities on G Capital and BANPU POWER 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 G Capital with a short position of BANPU POWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and BANPU POWER.

Diversification Opportunities for G Capital and BANPU POWER

0.8

Correlation Coefficient

G Capital  BANPU POWER

Very poor diversification

The 3 months correlation between GCAP and BANPU is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and BANPU POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANPU POWER and G Capital 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 G Capital Public are associated (or correlated) with BANPU POWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANPU POWER has no effect on the direction of G Capital i.e., G Capital and BANPU POWER go up and down completely randomly.

Pair Corralation between G Capital and BANPU POWER

Assuming the 90 days trading horizon G Capital Public is expected to generate 38.32 times more return on investment than BANPU POWER. However, G Capital is 38.32 times more volatile than BANPU POWER. It trades about 0.04 of its potential returns per unit of risk. BANPU POWER is currently generating about -0.05 per unit of risk. If you would invest  121.00  in G Capital Public on September 26, 2024 and sell it today you would lose (89.00) from holding G Capital Public or give up 73.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

G Capital Public  vs.  BANPU POWER

G Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BANPU POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANPU POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with G Capital and BANPU POWER

The main advantage of trading using opposite G Capital and BANPU POWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Capital position performs unexpectedly, BANPU POWER 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 BANPU POWER will offset losses from the drop in BANPU POWER's long position.

The idea behind G Capital Public and BANPU POWER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.