Correlation Between Gaztransport Technigaz and Nabtesco Corp
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Nabtesco Corp 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 Nabtesco Corp 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 Nabtesco Corp, you can compare the effects of market volatilities on Gaztransport Technigaz and Nabtesco Corp 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 Nabtesco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Nabtesco Corp.
Diversification Opportunities for Gaztransport Technigaz and Nabtesco Corp
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaztransport and Nabtesco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Nabtesco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabtesco Corp 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 Nabtesco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabtesco Corp has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Nabtesco Corp go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Nabtesco Corp
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.37 times more return on investment than Nabtesco Corp. However, Gaztransport Technigaz is 1.37 times more volatile than Nabtesco Corp. It trades about 0.37 of its potential returns per unit of risk. Nabtesco Corp is currently generating about 0.03 per unit of risk. If you would invest 12,910 in Gaztransport Technigaz SA on October 28, 2024 and sell it today you would earn a total of 1,920 from holding Gaztransport Technigaz SA or generate 14.87% 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. Nabtesco Corp
Performance |
| Timeline |
| Gaztransport Technigaz |
| Nabtesco Corp |
Gaztransport Technigaz and Nabtesco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Nabtesco Corp
The main advantage of trading using opposite Gaztransport Technigaz and Nabtesco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Nabtesco Corp 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 Nabtesco Corp will offset losses from the drop in Nabtesco Corp's long position.| Gaztransport Technigaz vs. ALTAIR RES INC | Gaztransport Technigaz vs. CVW CLEANTECH INC | Gaztransport Technigaz vs. Ryanair Holdings plc | Gaztransport Technigaz vs. Carnegie Clean Energy |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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