Correlation Between Gaztransport Technigaz and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Nomad Foods 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 Technigaz and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and Nomad Foods, you can compare the effects of market volatilities on Gaztransport Technigaz and Nomad Foods 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 Technigaz with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Nomad Foods.
Diversification Opportunities for Gaztransport Technigaz and Nomad Foods
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaztransport and Nomad is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and Gaztransport Technigaz 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 Technigaz SA are associated (or correlated) with Nomad Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomad Foods has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Nomad Foods go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Nomad Foods
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.42 times more return on investment than Nomad Foods. However, Gaztransport Technigaz is 1.42 times more volatile than Nomad Foods. It trades about 0.13 of its potential returns per unit of risk. Nomad Foods is currently generating about -0.28 per unit of risk. If you would invest 13,300 in Gaztransport Technigaz SA on October 12, 2024 and sell it today you would earn a total of 550.00 from holding Gaztransport Technigaz SA or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Nomad Foods
Performance |
| Timeline |
| Gaztransport Technigaz |
| Nomad Foods |
Gaztransport Technigaz and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Nomad Foods
The main advantage of trading using opposite Gaztransport Technigaz and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Nomad Foods 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 Nomad Foods will offset losses from the drop in Nomad Foods' long position.| Gaztransport Technigaz vs. GBS Software AG | Gaztransport Technigaz vs. NorAm Drilling AS | Gaztransport Technigaz vs. Take Two Interactive Software | Gaztransport Technigaz vs. CLEAN ENERGY FUELS |
| Nomad Foods vs. Strategic Education | Nomad Foods vs. Gaztransport Technigaz SA | Nomad Foods vs. Yuexiu Transport Infrastructure | Nomad Foods vs. CHINA EDUCATION GROUP |
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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