Correlation Between GoldMining and Gaztransport
Can any of the company-specific risk be diversified away by investing in both GoldMining and Gaztransport 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 GoldMining and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Gaztransport et Technigaz, you can compare the effects of market volatilities on GoldMining and Gaztransport 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 GoldMining with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Gaztransport.
Diversification Opportunities for GoldMining and Gaztransport
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoldMining and Gaztransport is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and GoldMining 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 GoldMining are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of GoldMining i.e., GoldMining and Gaztransport go up and down completely randomly.
Pair Corralation between GoldMining and Gaztransport
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Gaztransport. In addition to that, GoldMining is 2.35 times more volatile than Gaztransport et Technigaz. It trades about -0.03 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about -0.06 per unit of volatility. If you would invest 13,494 in Gaztransport et Technigaz on September 12, 2024 and sell it today you would lose (194.00) from holding Gaztransport et Technigaz or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
GoldMining vs. Gaztransport et Technigaz
Performance |
| Timeline |
| GoldMining |
| Gaztransport et Technigaz |
GoldMining and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Gaztransport
The main advantage of trading using opposite GoldMining and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| GoldMining vs. Hong Kong Land | GoldMining vs. Neometals | GoldMining vs. Coor Service Management | GoldMining vs. Fidelity Sustainable USD |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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