Correlation Between Gaztransport and EasyJet PLC
Can any of the company-specific risk be diversified away by investing in both Gaztransport and EasyJet PLC 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 EasyJet PLC 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 EasyJet PLC, you can compare the effects of market volatilities on Gaztransport and EasyJet PLC 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 EasyJet PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and EasyJet PLC.
Diversification Opportunities for Gaztransport and EasyJet PLC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaztransport and EasyJet is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and EasyJet PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyJet PLC 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 EasyJet PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyJet PLC has no effect on the direction of Gaztransport i.e., Gaztransport and EasyJet PLC go up and down completely randomly.
Pair Corralation between Gaztransport and EasyJet PLC
Assuming the 90 days trading horizon Gaztransport is expected to generate 1.53 times less return on investment than EasyJet PLC. But when comparing it to its historical volatility, Gaztransport et Technigaz is 1.3 times less risky than EasyJet PLC. It trades about 0.05 of its potential returns per unit of risk. EasyJet PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 32,733 in EasyJet PLC on September 23, 2024 and sell it today you would earn a total of 24,427 from holding EasyJet PLC or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. EasyJet PLC
Performance |
| Timeline |
| Gaztransport et Technigaz |
| EasyJet PLC |
Gaztransport and EasyJet PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and EasyJet PLC
The main advantage of trading using opposite Gaztransport and EasyJet PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, EasyJet PLC 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 EasyJet PLC will offset losses from the drop in EasyJet PLC's long position.| Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport vs. Triad Group PLC |
| EasyJet PLC vs. Cornish Metals | EasyJet PLC vs. Europa Metals | EasyJet PLC vs. Gaztransport et Technigaz | EasyJet PLC vs. Empire Metals Limited |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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