Correlation Between RTL Group and Gaztransport
Can any of the company-specific risk be diversified away by investing in both RTL Group 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 RTL Group and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and Gaztransport et Technigaz, you can compare the effects of market volatilities on RTL Group 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 RTL Group with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and Gaztransport.
Diversification Opportunities for RTL Group and Gaztransport
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RTL and Gaztransport is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA 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 RTL Group 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 RTL Group SA 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 RTL Group i.e., RTL Group and Gaztransport go up and down completely randomly.
Pair Corralation between RTL Group and Gaztransport
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the Gaztransport. In addition to that, RTL Group is 2.62 times more volatile than Gaztransport et Technigaz. It trades about -0.28 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.07 per unit of volatility. If you would invest 13,535 in Gaztransport et Technigaz on August 31, 2024 and sell it today you would earn a total of 245.00 from holding Gaztransport et Technigaz or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
RTL Group SA vs. Gaztransport et Technigaz
Performance |
| Timeline |
| RTL Group SA |
| Gaztransport et Technigaz |
RTL Group and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and Gaztransport
The main advantage of trading using opposite RTL Group and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group 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.| RTL Group vs. Gaztransport et Technigaz | RTL Group vs. Bisichi Mining PLC | RTL Group vs. EVS Broadcast Equipment | RTL Group vs. Molson Coors Beverage |
| Gaztransport vs. Neometals | Gaztransport vs. Coor Service Management | Gaztransport vs. Aeorema Communications Plc | Gaztransport vs. JLEN Environmental Assets |
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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