Correlation Between Gaztransport and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Lendinvest 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 Lendinvest 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 Lendinvest PLC, you can compare the effects of market volatilities on Gaztransport and Lendinvest 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Lendinvest PLC.
Diversification Opportunities for Gaztransport and Lendinvest PLC
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and Lendinvest is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Gaztransport i.e., Gaztransport and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Gaztransport and Lendinvest PLC
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 1.01 times more return on investment than Lendinvest PLC. However, Gaztransport is 1.01 times more volatile than Lendinvest PLC. It trades about 0.11 of its potential returns per unit of risk. Lendinvest PLC is currently generating about 0.08 per unit of risk. If you would invest 13,656 in Gaztransport et Technigaz on August 29, 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Lendinvest PLC
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Lendinvest PLC |
Gaztransport and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Lendinvest PLC
The main advantage of trading using opposite Gaztransport and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Lendinvest 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Gaztransport vs. Lendinvest PLC | Gaztransport vs. Neometals | Gaztransport vs. Coor Service Management | Gaztransport vs. Albion Technology General |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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