Correlation Between Gaztransport Technigaz and LANDSEA HOMES
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and LANDSEA HOMES 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 LANDSEA HOMES 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 LANDSEA HOMES P, you can compare the effects of market volatilities on Gaztransport Technigaz and LANDSEA HOMES 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 LANDSEA HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and LANDSEA HOMES.
Diversification Opportunities for Gaztransport Technigaz and LANDSEA HOMES
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and LANDSEA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and LANDSEA HOMES go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and LANDSEA HOMES
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.19 times less return on investment than LANDSEA HOMES. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 1.86 times less risky than LANDSEA HOMES. It trades about 0.04 of its potential returns per unit of risk. LANDSEA HOMES P is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,050 in LANDSEA HOMES P on September 2, 2024 and sell it today you would earn a total of 30.00 from holding LANDSEA HOMES P or generate 2.86% 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. LANDSEA HOMES P
Performance |
| Timeline |
| Gaztransport Technigaz |
| LANDSEA HOMES P |
Gaztransport Technigaz and LANDSEA HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and LANDSEA HOMES
The main advantage of trading using opposite Gaztransport Technigaz and LANDSEA HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, LANDSEA HOMES 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 LANDSEA HOMES will offset losses from the drop in LANDSEA HOMES's long position.| Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. Origin Agritech | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
| LANDSEA HOMES vs. Nishi Nippon Railroad Co | LANDSEA HOMES vs. CI GAMES SA | LANDSEA HOMES vs. Transportadora de Gas | LANDSEA HOMES vs. Gaztransport Technigaz SA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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