Correlation Between Gaztransport Technigaz and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Gaztransport Technigaz and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Yuexiu Transport.
Diversification Opportunities for Gaztransport Technigaz and Yuexiu Transport
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Yuexiu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Yuexiu Transport
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to under-perform the Yuexiu Transport. In addition to that, Gaztransport Technigaz is 2.56 times more volatile than Yuexiu Transport Infrastructure. It trades about -0.2 of its total potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.32 per unit of volatility. If you would invest 43.00 in Yuexiu Transport Infrastructure on September 24, 2024 and sell it today you would earn a total of 2.00 from holding Yuexiu Transport Infrastructure or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Gaztransport Technigaz |
| Yuexiu Transport Inf |
Gaztransport Technigaz and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Yuexiu Transport
The main advantage of trading using opposite Gaztransport Technigaz and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Gaztransport Technigaz vs. Schlumberger Limited | Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Baker Hughes Co |
| Yuexiu Transport vs. Transurban Group | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Arcosa Inc |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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