Correlation Between Gaztransport and Marks
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on Gaztransport and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Marks.
Diversification Opportunities for Gaztransport and Marks
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gaztransport and Marks is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Gaztransport i.e., Gaztransport and Marks go up and down completely randomly.
Pair Corralation between Gaztransport and Marks
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.71 times more return on investment than Marks. However, Gaztransport et Technigaz is 1.42 times less risky than Marks. It trades about 0.15 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.21 per unit of risk. If you would invest 13,411 in Gaztransport et Technigaz on October 30, 2024 and sell it today you would earn a total of 1,119 from holding Gaztransport et Technigaz or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Marks and Spencer
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Marks and Spencer |
Gaztransport and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Marks
The main advantage of trading using opposite Gaztransport and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Gaztransport vs. Vulcan Materials Co | Gaztransport vs. Eastinco Mining Exploration | Gaztransport vs. Adriatic Metals | Gaztransport vs. Cornish Metals |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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