Correlation Between Gaztransport and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Gaztransport and G5 Entertainment 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 G5 Entertainment 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 G5 Entertainment AB, you can compare the effects of market volatilities on Gaztransport and G5 Entertainment 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 G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and G5 Entertainment.
Diversification Opportunities for Gaztransport and G5 Entertainment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and 0QUS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment 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 G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Gaztransport i.e., Gaztransport and G5 Entertainment go up and down completely randomly.
Pair Corralation between Gaztransport and G5 Entertainment
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to under-perform the G5 Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Gaztransport et Technigaz is 2.27 times less risky than G5 Entertainment. The stock trades about -0.19 of its potential returns per unit of risk. The G5 Entertainment AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10,840 in G5 Entertainment AB on September 12, 2024 and sell it today you would earn a total of 20.00 from holding G5 Entertainment AB or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. G5 Entertainment AB
Performance |
| Timeline |
| Gaztransport et Technigaz |
| G5 Entertainment |
Gaztransport and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and G5 Entertainment
The main advantage of trading using opposite Gaztransport and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| Gaztransport vs. MyHealthChecked Plc | Gaztransport vs. Hansa Investment | Gaztransport vs. Oakley Capital Investments | Gaztransport vs. HCA Healthcare |
| G5 Entertainment vs. Tatton Asset Management | G5 Entertainment vs. Melia Hotels | G5 Entertainment vs. Litigation Capital Management | G5 Entertainment vs. Host Hotels Resorts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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