Correlation Between GULF ENERGY and Intouch Holdings

Can any of the company-specific risk be diversified away by investing in both GULF ENERGY and Intouch Holdings 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 Intouch Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GULF ENERGY DEVELOPMENT NVDR and Intouch Holdings Public, you can compare the effects of market volatilities on GULF ENERGY and Intouch Holdings 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 Intouch Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GULF ENERGY and Intouch Holdings.

Diversification Opportunities for GULF ENERGY and Intouch Holdings

-0.11

Correlation Coefficient

GULF ENERGY  Intouch Holdings

Good diversification

The 3 months correlation between GULF and Intouch is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GULF ENERGY DEVELOPMENT NVDR and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public 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 NVDR are associated (or correlated) with Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of GULF ENERGY i.e., GULF ENERGY and Intouch Holdings go up and down completely randomly.

Pair Corralation between GULF ENERGY and Intouch Holdings

Assuming the 90 days trading horizon GULF ENERGY is expected to generate 2.13 times less return on investment than Intouch Holdings. In addition to that, GULF ENERGY is 1.15 times more volatile than Intouch Holdings Public. It trades about 0.02 of its total potential returns per unit of risk. Intouch Holdings Public is currently generating about 0.06 per unit of volatility. If you would invest  6,795  in Intouch Holdings Public on September 25, 2024 and sell it today you would earn a total of  2,855  from holding Intouch Holdings Public or generate 42.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.72%
Values	Daily Returns

GULF ENERGY DEVELOPMENT NVDR  vs.  Intouch Holdings Public

GULF ENERGY DEVELOPMENT

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GULF ENERGY DEVELOPMENT NVDR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting essential indicators, GULF ENERGY sustained solid returns over the last few months and may actually be approaching a breakup point.

Intouch Holdings Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intouch Holdings Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Intouch Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GULF ENERGY and Intouch Holdings

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

The idea behind GULF ENERGY DEVELOPMENT NVDR and Intouch Holdings Public 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.