Correlation Between Gaztransport and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Summit Materials 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 Summit Materials 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 Summit Materials Cl, you can compare the effects of market volatilities on Gaztransport and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Summit Materials.
Diversification Opportunities for Gaztransport and Summit Materials
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Summit is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Summit Materials Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Gaztransport i.e., Gaztransport and Summit Materials go up and down completely randomly.
Pair Corralation between Gaztransport and Summit Materials
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 3.15 times more return on investment than Summit Materials. However, Gaztransport is 3.15 times more volatile than Summit Materials Cl. It trades about 0.21 of its potential returns per unit of risk. Summit Materials Cl is currently generating about 0.23 per unit of risk. If you would invest 13,290 in Gaztransport et Technigaz on October 12, 2024 and sell it today you would earn a total of 880.00 from holding Gaztransport et Technigaz or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Summit Materials Cl
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Summit Materials |
Gaztransport and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Summit Materials
The main advantage of trading using opposite Gaztransport and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Gaztransport vs. Solstad Offshore ASA | Gaztransport vs. Zegona Communications Plc | Gaztransport vs. SBM Offshore NV | Gaztransport vs. Mineral Financial Investments |
| Summit Materials vs. Young Cos Brewery | Summit Materials vs. Adriatic Metals | Summit Materials vs. Gaztransport et Technigaz | Summit Materials vs. Alien Metals |
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 Stocks Directory module to find actively traded stocks across global markets.
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