Correlation Between Gaztransport and Empire Metals
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Empire Metals 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 Empire Metals 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 Empire Metals Limited, you can compare the effects of market volatilities on Gaztransport and Empire Metals 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 Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Empire Metals.
Diversification Opportunities for Gaztransport and Empire Metals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaztransport and Empire is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of Gaztransport i.e., Gaztransport and Empire Metals go up and down completely randomly.
Pair Corralation between Gaztransport and Empire Metals
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.48 times more return on investment than Empire Metals. However, Gaztransport et Technigaz is 2.09 times less risky than Empire Metals. It trades about 0.11 of its potential returns per unit of risk. Empire Metals Limited is currently generating about -0.23 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 374.00 from holding Gaztransport et Technigaz or generate 2.74% 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. Empire Metals Limited
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Empire Metals Limited |
Gaztransport and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Empire Metals
The main advantage of trading using opposite Gaztransport and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| Gaztransport vs. BW Offshore | Gaztransport vs. Tyson Foods Cl | Gaztransport vs. Capital Metals PLC | Gaztransport vs. Zoom Video Communications |
| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Centamin PLC | Empire Metals vs. Atalaya Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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