Correlation Between Gaztransport and Naked Wines
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Naked Wines 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 Naked Wines 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 Naked Wines plc, you can compare the effects of market volatilities on Gaztransport and Naked Wines 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Naked Wines.
Diversification Opportunities for Gaztransport and Naked Wines
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and Naked is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of Gaztransport i.e., Gaztransport and Naked Wines go up and down completely randomly.
Pair Corralation between Gaztransport and Naked Wines
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.45 times more return on investment than Naked Wines. However, Gaztransport et Technigaz is 2.23 times less risky than Naked Wines. It trades about 0.21 of its potential returns per unit of risk. Naked Wines plc is currently generating about -0.09 per unit of risk. If you would invest 13,002 in Gaztransport et Technigaz on October 17, 2024 and sell it today you would earn a total of 853.00 from holding Gaztransport et Technigaz or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Naked Wines plc
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Naked Wines plc |
Gaztransport and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Naked Wines
The main advantage of trading using opposite Gaztransport and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| Gaztransport vs. Software Circle plc | Gaztransport vs. Ecofin Global Utilities | Gaztransport vs. Sunny Optical Technology | Gaztransport vs. United Utilities Group |
| Naked Wines vs. Aptitude Software Group | Naked Wines vs. Austevoll Seafood ASA | Naked Wines vs. Gaztransport et Technigaz | Naked Wines vs. Trainline Plc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |