Correlation Between Gaztransport and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Auto Trader 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 Auto Trader 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 Auto Trader Group, you can compare the effects of market volatilities on Gaztransport and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Auto Trader.
Diversification Opportunities for Gaztransport and Auto Trader
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaztransport and Auto is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Gaztransport i.e., Gaztransport and Auto Trader go up and down completely randomly.
Pair Corralation between Gaztransport and Auto Trader
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 2.16 times more return on investment than Auto Trader. However, Gaztransport is 2.16 times more volatile than Auto Trader Group. It trades about 0.25 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.35 per unit of risk. If you would invest 13,002 in Gaztransport et Technigaz on October 17, 2024 and sell it today you would earn a total of 1,088 from holding Gaztransport et Technigaz or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Auto Trader Group
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Auto Trader Group |
Gaztransport and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Auto Trader
The main advantage of trading using opposite Gaztransport and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Gaztransport vs. Micron Technology | Gaztransport vs. Hochschild Mining plc | Gaztransport vs. Pressure Technologies Plc | Gaztransport vs. Griffin Mining |
| Auto Trader vs. Flow Traders NV | Auto Trader vs. Albion Technology General | Auto Trader vs. Vitec Software Group | Auto Trader vs. Allianz Technology Trust |
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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