Correlation Between Gaztransport and MG Plc
Can any of the company-specific risk be diversified away by investing in both Gaztransport and MG 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 MG 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 MG Plc, you can compare the effects of market volatilities on Gaztransport and MG 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 MG Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and MG Plc.
Diversification Opportunities for Gaztransport and MG Plc
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaztransport and MNG is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of Gaztransport i.e., Gaztransport and MG Plc go up and down completely randomly.
Pair Corralation between Gaztransport and MG Plc
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to under-perform the MG Plc. In addition to that, Gaztransport is 1.18 times more volatile than MG Plc. It trades about -0.06 of its total potential returns per unit of risk. MG Plc is currently generating about 0.02 per unit of volatility. If you would invest 19,870 in MG Plc on September 12, 2024 and sell it today you would earn a total of 45.00 from holding MG Plc or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. MG Plc
Performance |
| Timeline |
| Gaztransport et Technigaz |
| MG Plc |
Gaztransport and MG Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and MG Plc
The main advantage of trading using opposite Gaztransport and MG Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, MG 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 MG Plc will offset losses from the drop in MG Plc's long position.| Gaztransport vs. MyHealthChecked Plc | Gaztransport vs. Hansa Investment | Gaztransport vs. Oakley Capital Investments | Gaztransport vs. HCA Healthcare |
| MG Plc vs. Sabre Insurance Group | MG Plc vs. Royal Bank of | MG Plc vs. Southwest Airlines Co | MG Plc vs. Taiwan Semiconductor Manufacturing |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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