Correlation Between GRUPO CARSO-A1 and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 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 GRUPO CARSO-A1 and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO CARSO A1 and Gaztransport Technigaz SA, you can compare the effects of market volatilities on GRUPO CARSO-A1 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 GRUPO CARSO-A1 with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and Gaztransport Technigaz.
Diversification Opportunities for GRUPO CARSO-A1 and Gaztransport Technigaz
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GRUPO and Gaztransport is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and GRUPO CARSO-A1 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 GRUPO CARSO A1 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 GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between GRUPO CARSO-A1 and Gaztransport Technigaz
Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 2.84 times more return on investment than Gaztransport Technigaz. However, GRUPO CARSO-A1 is 2.84 times more volatile than Gaztransport Technigaz SA. It trades about 0.05 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.11 per unit of risk. If you would invest 550.00 in GRUPO CARSO A1 on September 3, 2024 and sell it today you would earn a total of 15.00 from holding GRUPO CARSO A1 or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO CARSO A1 vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| GRUPO CARSO A1 |
| Gaztransport Technigaz |
GRUPO CARSO-A1 and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO CARSO-A1 and Gaztransport Technigaz
The main advantage of trading using opposite GRUPO CARSO-A1 and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 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.| GRUPO CARSO-A1 vs. Transportadora de Gas | GRUPO CARSO-A1 vs. FORMPIPE SOFTWARE AB | GRUPO CARSO-A1 vs. CPU SOFTWAREHOUSE | GRUPO CARSO-A1 vs. CyberArk Software |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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