Correlation Between Gaztransport and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on Gaztransport and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Lindsell Train.
Diversification Opportunities for Gaztransport and Lindsell Train
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaztransport and Lindsell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Gaztransport i.e., Gaztransport and Lindsell Train go up and down completely randomly.
Pair Corralation between Gaztransport and Lindsell Train
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 1.01 times more return on investment than Lindsell Train. However, Gaztransport is 1.01 times more volatile than Lindsell Train Investment. It trades about 0.32 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about 0.2 per unit of risk. If you would invest 13,730 in Gaztransport et Technigaz on November 5, 2024 and sell it today you would earn a total of 895.00 from holding Gaztransport et Technigaz or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Lindsell Train Investment
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Lindsell Train Investment |
Gaztransport and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Lindsell Train
The main advantage of trading using opposite Gaztransport and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Gaztransport vs. Hochschild Mining plc | Gaztransport vs. Zoom Video Communications | Gaztransport vs. Fonix Mobile plc | Gaztransport vs. Eastinco Mining Exploration |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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