Correlation Between Gaztransport Technigaz and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS, you can compare the effects of market volatilities on Gaztransport Technigaz and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and APPLIED MATERIALS.
Diversification Opportunities for Gaztransport Technigaz and APPLIED MATERIALS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gaztransport and APPLIED is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and APPLIED MATERIALS
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.6 times more return on investment than APPLIED MATERIALS. However, Gaztransport Technigaz SA is 1.66 times less risky than APPLIED MATERIALS. It trades about 0.08 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about 0.01 per unit of risk. If you would invest 13,310 in Gaztransport Technigaz SA on September 1, 2024 and sell it today you would earn a total of 350.00 from holding Gaztransport Technigaz SA or generate 2.63% 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. APPLIED MATERIALS
Performance |
| Timeline |
| Gaztransport Technigaz |
| APPLIED MATERIALS |
Gaztransport Technigaz and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and APPLIED MATERIALS
The main advantage of trading using opposite Gaztransport Technigaz and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings |
| APPLIED MATERIALS vs. QBE Insurance Group | APPLIED MATERIALS vs. Selective Insurance Group | APPLIED MATERIALS vs. Singapore Reinsurance | APPLIED MATERIALS vs. United Natural Foods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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