Correlation Between Gaztransport and Bath Body
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Bath Body 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 Bath Body 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 Bath Body Works, you can compare the effects of market volatilities on Gaztransport and Bath Body 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 Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Bath Body.
Diversification Opportunities for Gaztransport and Bath Body
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gaztransport and Bath is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works 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 Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Gaztransport i.e., Gaztransport and Bath Body go up and down completely randomly.
Pair Corralation between Gaztransport and Bath Body
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.74 times more return on investment than Bath Body. However, Gaztransport et Technigaz is 1.35 times less risky than Bath Body. It trades about 0.35 of its potential returns per unit of risk. Bath Body Works is currently generating about 0.12 per unit of risk. If you would invest 13,730 in Gaztransport et Technigaz on November 7, 2024 and sell it today you would earn a total of 1,180 from holding Gaztransport et Technigaz or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Bath Body Works
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Bath Body Works |
Gaztransport and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Bath Body
The main advantage of trading using opposite Gaztransport and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Gaztransport vs. BW Offshore | Gaztransport vs. Gear4music Plc | Gaztransport vs. Air Products Chemicals | Gaztransport vs. The Mercantile Investment |
| Bath Body vs. McEwen Mining | Bath Body vs. GoldMining | Bath Body vs. National Beverage Corp | Bath Body vs. Molson Coors Beverage |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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