Correlation Between Gaztransport Technigaz and Prosus NV
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Prosus NV 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 Prosus NV 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 Prosus NV, you can compare the effects of market volatilities on Gaztransport Technigaz and Prosus NV 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Prosus NV.
Diversification Opportunities for Gaztransport Technigaz and Prosus NV
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaztransport and Prosus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Prosus NV go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Prosus NV
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.78 times less return on investment than Prosus NV. In addition to that, Gaztransport Technigaz is 1.15 times more volatile than Prosus NV. It trades about 0.04 of its total potential returns per unit of risk. Prosus NV is currently generating about 0.07 per unit of volatility. If you would invest 3,380 in Prosus NV on September 3, 2024 and sell it today you would earn a total of 473.00 from holding Prosus NV or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Prosus NV
Performance |
| Timeline |
| Gaztransport Technigaz |
| Prosus NV |
Gaztransport Technigaz and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Prosus NV
The main advantage of trading using opposite Gaztransport Technigaz and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| Gaztransport Technigaz vs. NISSAN CHEMICAL IND | Gaztransport Technigaz vs. Siamgas And Petrochemicals | Gaztransport Technigaz vs. STMicroelectronics NV | Gaztransport Technigaz vs. LPKF Laser Electronics |
| Prosus NV vs. Japan Asia Investment | Prosus NV vs. SLR Investment Corp | Prosus NV vs. CapitaLand Investment Limited | Prosus NV vs. Astral Foods Limited |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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