Correlation Between Gaztransport Technigaz and Welltower
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Welltower 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 Welltower 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 Welltower, you can compare the effects of market volatilities on Gaztransport Technigaz and Welltower 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 Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Welltower.
Diversification Opportunities for Gaztransport Technigaz and Welltower
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaztransport and Welltower is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower 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 Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Welltower go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Welltower
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 2.28 times less return on investment than Welltower. In addition to that, Gaztransport Technigaz is 1.55 times more volatile than Welltower. It trades about 0.04 of its total potential returns per unit of risk. Welltower is currently generating about 0.15 per unit of volatility. If you would invest 8,001 in Welltower on September 14, 2024 and sell it today you would earn a total of 4,229 from holding Welltower or generate 52.86% 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. Welltower
Performance |
| Timeline |
| Gaztransport Technigaz |
| Welltower |
Gaztransport Technigaz and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Welltower
The main advantage of trading using opposite Gaztransport Technigaz and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower'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 |
| Welltower vs. GameStop Corp | Welltower vs. Hochschild Mining plc | Welltower vs. International Game Technology | Welltower vs. Jacquet Metal Service |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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