Correlation Between Gaztransport Technigaz and BROADWIND ENRGY
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and BROADWIND ENRGY 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 BROADWIND ENRGY 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 BROADWIND ENRGY, you can compare the effects of market volatilities on Gaztransport Technigaz and BROADWIND ENRGY 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 BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and BROADWIND ENRGY.
Diversification Opportunities for Gaztransport Technigaz and BROADWIND ENRGY
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaztransport and BROADWIND is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY 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 BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and BROADWIND ENRGY go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and BROADWIND ENRGY
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 2.54 times less return on investment than BROADWIND ENRGY. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 1.82 times less risky than BROADWIND ENRGY. It trades about 0.1 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 168.00 in BROADWIND ENRGY on October 12, 2024 and sell it today you would earn a total of 13.00 from holding BROADWIND ENRGY or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. BROADWIND ENRGY
Performance |
| Timeline |
| Gaztransport Technigaz |
| BROADWIND ENRGY |
Gaztransport Technigaz and BROADWIND ENRGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and BROADWIND ENRGY
The main advantage of trading using opposite Gaztransport Technigaz and BROADWIND ENRGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, BROADWIND ENRGY 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 BROADWIND ENRGY will offset losses from the drop in BROADWIND ENRGY's long position.| Gaztransport Technigaz vs. REVO INSURANCE SPA | Gaztransport Technigaz vs. Webster Financial | Gaztransport Technigaz vs. NORTHEAST UTILITIES | Gaztransport Technigaz vs. Commonwealth Bank of |
| BROADWIND ENRGY vs. Nok Airlines PCL | BROADWIND ENRGY vs. InterContinental Hotels Group | BROADWIND ENRGY vs. Singapore Airlines Limited | BROADWIND ENRGY vs. Xenia Hotels Resorts |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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