Correlation Between Gaztransport Technigaz and Great Portland
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Great Portland 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 Great Portland 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 Great Portland Estates, you can compare the effects of market volatilities on Gaztransport Technigaz and Great Portland 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 Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Great Portland.
Diversification Opportunities for Gaztransport Technigaz and Great Portland
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gaztransport and Great is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates 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 Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Great Portland go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Great Portland
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.68 times more return on investment than Great Portland. However, Gaztransport Technigaz SA is 1.47 times less risky than Great Portland. It trades about 0.05 of its potential returns per unit of risk. Great Portland Estates is currently generating about -0.03 per unit of risk. If you would invest 9,415 in Gaztransport Technigaz SA on October 14, 2024 and sell it today you would earn a total of 4,655 from holding Gaztransport Technigaz SA or generate 49.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Great Portland Estates
Performance |
| Timeline |
| Gaztransport Technigaz |
| Great Portland Estates |
Gaztransport Technigaz and Great Portland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Great Portland
The main advantage of trading using opposite Gaztransport Technigaz and Great Portland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Great Portland 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 Great Portland will offset losses from the drop in Great Portland's long position.The idea behind Gaztransport Technigaz SA and Great Portland Estates pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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