Correlation Between Gaztransport Technigaz and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Lion Biotechnologies 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 Lion Biotechnologies 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 Lion Biotechnologies, you can compare the effects of market volatilities on Gaztransport Technigaz and Lion Biotechnologies 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 Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Lion Biotechnologies.
Diversification Opportunities for Gaztransport Technigaz and Lion Biotechnologies
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaztransport and Lion is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies 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 Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Lion Biotechnologies
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.62 times more return on investment than Lion Biotechnologies. However, Gaztransport Technigaz SA is 1.61 times less risky than Lion Biotechnologies. It trades about -0.13 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about -0.39 per unit of risk. If you would invest 13,444 in Gaztransport Technigaz SA on September 28, 2024 and sell it today you would lose (664.00) from holding Gaztransport Technigaz SA or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Lion Biotechnologies
Performance |
| Timeline |
| Gaztransport Technigaz |
| Lion Biotechnologies |
Gaztransport Technigaz and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Lion Biotechnologies
The main advantage of trading using opposite Gaztransport Technigaz and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| Gaztransport Technigaz vs. CECO ENVIRONMENTAL | Gaztransport Technigaz vs. Caltagirone SpA | Gaztransport Technigaz vs. SINGAPORE AIRLINES | Gaztransport Technigaz vs. JAPAN AIRLINES |
| Lion Biotechnologies vs. Haverty Furniture Companies | Lion Biotechnologies vs. AEON STORES | Lion Biotechnologies vs. INVITATION HOMES DL | Lion Biotechnologies vs. MARKET VECTR RETAIL |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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