Correlation Between Gaztransport Technigaz and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and MidCap Financial 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 MidCap Financial 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 MidCap Financial Investment, you can compare the effects of market volatilities on Gaztransport Technigaz and MidCap Financial 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 MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and MidCap Financial.
Diversification Opportunities for Gaztransport Technigaz and MidCap Financial
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaztransport and MidCap is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv 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 MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and MidCap Financial go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and MidCap Financial
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.39 times more return on investment than MidCap Financial. However, Gaztransport Technigaz is 1.39 times more volatile than MidCap Financial Investment. It trades about 0.05 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.07 per unit of risk. If you would invest 9,738 in Gaztransport Technigaz SA on November 5, 2024 and sell it today you would earn a total of 4,902 from holding Gaztransport Technigaz SA or generate 50.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. MidCap Financial Investment
Performance |
| Timeline |
| Gaztransport Technigaz |
| MidCap Financial Inv |
Gaztransport Technigaz and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and MidCap Financial
The main advantage of trading using opposite Gaztransport Technigaz and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| Gaztransport Technigaz vs. TERADATA | Gaztransport Technigaz vs. China Datang | Gaztransport Technigaz vs. MAG SILVER | Gaztransport Technigaz vs. MAGNUM MINING EXP |
| MidCap Financial vs. SILICON LABORATOR | MidCap Financial vs. Japan Medical Dynamic | MidCap Financial vs. TRI CHEMICAL LABORATINC | MidCap Financial vs. Eastman Chemical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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