Correlation Between Gaztransport and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Gaztransport and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on Gaztransport and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and AMG Advanced.
Diversification Opportunities for Gaztransport and AMG Advanced
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaztransport and AMG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Gaztransport i.e., Gaztransport and AMG Advanced go up and down completely randomly.
Pair Corralation between Gaztransport and AMG Advanced
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.59 times more return on investment than AMG Advanced. However, Gaztransport et Technigaz is 1.69 times less risky than AMG Advanced. It trades about 0.14 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.19 per unit of risk. If you would invest 13,656 in Gaztransport et Technigaz on August 28, 2024 and sell it today you would earn a total of 454.00 from holding Gaztransport et Technigaz or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Gaztransport et Technigaz |
| AMG Advanced Metallu |
Gaztransport and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and AMG Advanced
The main advantage of trading using opposite Gaztransport and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Gaztransport vs. BW Offshore | Gaztransport vs. Tyson Foods Cl | Gaztransport vs. Capital Metals PLC | Gaztransport vs. Zoom Video Communications |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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