Correlation Between British American and Gaztransport
Can any of the company-specific risk be diversified away by investing in both British American and Gaztransport 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 British American and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Gaztransport et Technigaz, you can compare the effects of market volatilities on British American and Gaztransport 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 British American with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Gaztransport.
Diversification Opportunities for British American and Gaztransport
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between British and Gaztransport is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and British American 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 British American Tobacco are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of British American i.e., British American and Gaztransport go up and down completely randomly.
Pair Corralation between British American and Gaztransport
Assuming the 90 days trading horizon British American Tobacco is expected to generate 0.78 times more return on investment than Gaztransport. However, British American Tobacco is 1.28 times less risky than Gaztransport. It trades about 0.1 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about -0.18 per unit of risk. If you would invest 3,666 in British American Tobacco on September 19, 2024 and sell it today you would earn a total of 61.00 from holding British American Tobacco or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Gaztransport et Technigaz
Performance |
| Timeline |
| British American Tobacco |
| Gaztransport et Technigaz |
British American and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Gaztransport
The main advantage of trading using opposite British American and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| British American vs. Ocean Harvest Technology | British American vs. Allianz Technology Trust | British American vs. Auction Technology Group | British American vs. Cognizant Technology Solutions |
| Gaztransport vs. Griffin Mining | Gaztransport vs. McEwen Mining | Gaztransport vs. Samsung Electronics Co | Gaztransport vs. Compal Electronics GDR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |