Correlation Between Gaztransport Technigaz and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Choice Hotels 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 Choice Hotels 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 Choice Hotels International, you can compare the effects of market volatilities on Gaztransport Technigaz and Choice Hotels 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 Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Choice Hotels.
Diversification Opportunities for Gaztransport Technigaz and Choice Hotels
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaztransport and Choice is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern 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 Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Choice Hotels go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Choice Hotels
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.52 times more return on investment than Choice Hotels. However, Gaztransport Technigaz is 1.52 times more volatile than Choice Hotels International. It trades about 0.17 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.11 per unit of risk. If you would invest 12,950 in Gaztransport Technigaz SA on October 11, 2024 and sell it today you would earn a total of 760.00 from holding Gaztransport Technigaz SA or generate 5.87% 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. Choice Hotels International
Performance |
| Timeline |
| Gaztransport Technigaz |
| Choice Hotels Intern |
Gaztransport Technigaz and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Choice Hotels
The main advantage of trading using opposite Gaztransport Technigaz and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Gaztransport Technigaz vs. REVO INSURANCE SPA | Gaztransport Technigaz vs. Webster Financial | Gaztransport Technigaz vs. NORTHEAST UTILITIES | Gaztransport Technigaz vs. Commonwealth Bank of |
| Choice Hotels vs. SEI INVESTMENTS | Choice Hotels vs. Japan Asia Investment | Choice Hotels vs. Apollo Investment Corp | Choice Hotels vs. SLR Investment Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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