Correlation Between Gaztransport and Young Cos
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Young Cos 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 Young Cos 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 Young Cos Brewery, you can compare the effects of market volatilities on Gaztransport and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Young Cos.
Diversification Opportunities for Gaztransport and Young Cos
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gaztransport and Young is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of Gaztransport i.e., Gaztransport and Young Cos go up and down completely randomly.
Pair Corralation between Gaztransport and Young Cos
Assuming the 90 days trading horizon Gaztransport is expected to generate 2.21 times less return on investment than Young Cos. But when comparing it to its historical volatility, Gaztransport et Technigaz is 1.3 times less risky than Young Cos. It trades about 0.06 of its potential returns per unit of risk. Young Cos Brewery is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 60,490 in Young Cos Brewery on August 29, 2024 and sell it today you would earn a total of 2,110 from holding Young Cos Brewery or generate 3.49% 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. Young Cos Brewery
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Young Cos Brewery |
Gaztransport and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Young Cos
The main advantage of trading using opposite Gaztransport and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' long position.| Gaztransport vs. Lendinvest PLC | Gaztransport vs. Neometals | Gaztransport vs. Albion Technology General | Gaztransport vs. Jupiter Fund Management |
| Young Cos vs. Ondine Biomedical | Young Cos vs. Europa Metals | Young Cos vs. Lendinvest PLC | Young Cos vs. Neometals |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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