Correlation Between Gaztransport and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms, you can compare the effects of market volatilities on Gaztransport and Orient Telecoms 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 Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Orient Telecoms.
Diversification Opportunities for Gaztransport and Orient Telecoms
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gaztransport and Orient is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms 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 Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of Gaztransport i.e., Gaztransport and Orient Telecoms go up and down completely randomly.
Pair Corralation between Gaztransport and Orient Telecoms
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.79 times more return on investment than Orient Telecoms. However, Gaztransport et Technigaz is 1.27 times less risky than Orient Telecoms. It trades about 0.05 of its potential returns per unit of risk. Orient Telecoms is currently generating about -0.06 per unit of risk. If you would invest 9,487 in Gaztransport et Technigaz on August 30, 2024 and sell it today you would earn a total of 4,378 from holding Gaztransport et Technigaz or generate 46.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Orient Telecoms
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Orient Telecoms |
Gaztransport and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Orient Telecoms
The main advantage of trading using opposite Gaztransport and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Orient Telecoms 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 Orient Telecoms will offset losses from the drop in Orient Telecoms' long position.| Gaztransport vs. Lendinvest PLC | Gaztransport vs. Neometals | Gaztransport vs. Albion Technology General | Gaztransport vs. Jupiter Fund Management |
| Orient Telecoms vs. Walmart | Orient Telecoms vs. BYD Co | Orient Telecoms vs. Volkswagen AG | Orient Telecoms vs. Volkswagen AG Non Vtg |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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