Correlation Between MEDICAL FACILITIES and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Gaztransport Technigaz 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 MEDICAL FACILITIES and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Gaztransport Technigaz SA, you can compare the effects of market volatilities on MEDICAL FACILITIES and Gaztransport Technigaz 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 MEDICAL FACILITIES with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Gaztransport Technigaz.
Diversification Opportunities for MEDICAL FACILITIES and Gaztransport Technigaz
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MEDICAL and Gaztransport is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Gaztransport Technigaz
Assuming the 90 days horizon MEDICAL FACILITIES is expected to generate 2.66 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, MEDICAL FACILITIES NEW is 1.11 times less risky than Gaztransport Technigaz. It trades about 0.14 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 12,760 in Gaztransport Technigaz SA on November 1, 2024 and sell it today you would earn a total of 1,770 from holding Gaztransport Technigaz SA or generate 13.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Gaztransport Technigaz |
MEDICAL FACILITIES and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Gaztransport Technigaz
The main advantage of trading using opposite MEDICAL FACILITIES and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, Gaztransport Technigaz 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 Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| MEDICAL FACILITIES vs. Alliance Data Systems | MEDICAL FACILITIES vs. Automatic Data Processing | MEDICAL FACILITIES vs. DATADOT TECHNOLOGY | MEDICAL FACILITIES vs. Pure Storage |
| Gaztransport Technigaz vs. Apollo Medical Holdings | Gaztransport Technigaz vs. CREO MEDICAL GRP | Gaztransport Technigaz vs. HK Electric Investments | Gaztransport Technigaz vs. MEDICAL FACILITIES NEW |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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