Correlation Between Gaztransport Technigaz and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Gaztransport Technigaz and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and AIR PRODCHEMICALS.
Diversification Opportunities for Gaztransport Technigaz and AIR PRODCHEMICALS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and AIR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and AIR PRODCHEMICALS
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.3 times less return on investment than AIR PRODCHEMICALS. In addition to that, Gaztransport Technigaz is 1.0 times more volatile than AIR PRODCHEMICALS. It trades about 0.04 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.05 per unit of volatility. If you would invest 24,120 in AIR PRODCHEMICALS on September 14, 2024 and sell it today you would earn a total of 5,630 from holding AIR PRODCHEMICALS or generate 23.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Gaztransport Technigaz |
| AIR PRODCHEMICALS |
Gaztransport Technigaz and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and AIR PRODCHEMICALS
The main advantage of trading using opposite Gaztransport Technigaz and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. NOV Inc | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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