Correlation Between Gaztransport Technigaz and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on Gaztransport Technigaz and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Goldman Sachs.
Diversification Opportunities for Gaztransport Technigaz and Goldman Sachs
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaztransport and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Goldman Sachs go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Goldman Sachs
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 7.19 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 2.25 times less risky than Goldman Sachs. It trades about 0.08 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 47,785 in The Goldman Sachs on September 1, 2024 and sell it today you would earn a total of 10,145 from holding The Goldman Sachs or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. The Goldman Sachs
Performance |
| Timeline |
| Gaztransport Technigaz |
| Goldman Sachs |
Gaztransport Technigaz and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Goldman Sachs
The main advantage of trading using opposite Gaztransport Technigaz and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings |
| Goldman Sachs vs. H FARM SPA | Goldman Sachs vs. United Insurance Holdings | Goldman Sachs vs. HANOVER INSURANCE | Goldman Sachs vs. Selective Insurance Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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