Correlation Between Gaztransport and FC Investment
Can any of the company-specific risk be diversified away by investing in both Gaztransport and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on Gaztransport and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and FC Investment.
Diversification Opportunities for Gaztransport and FC Investment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaztransport and FCIT is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Gaztransport i.e., Gaztransport and FC Investment go up and down completely randomly.
Pair Corralation between Gaztransport and FC Investment
Assuming the 90 days trading horizon Gaztransport is expected to generate 3.65 times less return on investment than FC Investment. In addition to that, Gaztransport is 1.6 times more volatile than FC Investment Trust. It trades about 0.07 of its total potential returns per unit of risk. FC Investment Trust is currently generating about 0.44 per unit of volatility. If you would invest 104,800 in FC Investment Trust on August 31, 2024 and sell it today you would earn a total of 7,600 from holding FC Investment Trust or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. FC Investment Trust
Performance |
| Timeline |
| Gaztransport et Technigaz |
| FC Investment Trust |
Gaztransport and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and FC Investment
The main advantage of trading using opposite Gaztransport and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Gaztransport vs. Neometals | Gaztransport vs. Coor Service Management | Gaztransport vs. Aeorema Communications Plc | Gaztransport vs. JLEN Environmental Assets |
| FC Investment vs. Alaska Air Group | FC Investment vs. DXC Technology Co | FC Investment vs. Porvair plc | FC Investment vs. AIM ImmunoTech |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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