Correlation Between Gaztransport and British American
Can any of the company-specific risk be diversified away by investing in both Gaztransport and British American 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 Gaztransport and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and British American Tobacco, you can compare the effects of market volatilities on Gaztransport and British American 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 Gaztransport with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and British American.
Diversification Opportunities for Gaztransport and British American
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gaztransport and British is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Gaztransport 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 Gaztransport et Technigaz are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Gaztransport i.e., Gaztransport and British American go up and down completely randomly.
Pair Corralation between Gaztransport and British American
Assuming the 90 days trading horizon Gaztransport is expected to generate 2.35 times less return on investment than British American. In addition to that, Gaztransport is 1.8 times more volatile than British American Tobacco. It trades about 0.06 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.26 per unit of volatility. If you would invest 3,426 in British American Tobacco on September 19, 2024 and sell it today you would earn a total of 301.00 from holding British American Tobacco or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. British American Tobacco
Performance |
| Timeline |
| Gaztransport et Technigaz |
| British American Tobacco |
Gaztransport and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and British American
The main advantage of trading using opposite Gaztransport and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Gaztransport vs. Griffin Mining | Gaztransport vs. McEwen Mining | Gaztransport vs. Samsung Electronics Co | Gaztransport vs. Compal Electronics GDR |
| British American vs. Ocean Harvest Technology | British American vs. Allianz Technology Trust | British American vs. Auction Technology Group | British American vs. Cognizant Technology Solutions |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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