Correlation Between Gaztransport Technigaz and INTERNET INJPADR
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and INTERNET INJPADR 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 INTERNET INJPADR 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 INTERNET INJPADR 1, you can compare the effects of market volatilities on Gaztransport Technigaz and INTERNET INJPADR 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 INTERNET INJPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and INTERNET INJPADR.
Diversification Opportunities for Gaztransport Technigaz and INTERNET INJPADR
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and INTERNET is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and INTERNET INJPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNET INJPADR 1 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 INTERNET INJPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNET INJPADR 1 has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and INTERNET INJPADR go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and INTERNET INJPADR
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.26 times more return on investment than INTERNET INJPADR. However, Gaztransport Technigaz is 1.26 times more volatile than INTERNET INJPADR 1. It trades about 0.33 of its potential returns per unit of risk. INTERNET INJPADR 1 is currently generating about -0.06 per unit of risk. If you would invest 12,760 in Gaztransport Technigaz SA on November 3, 2024 and sell it today you would earn a total of 1,880 from holding Gaztransport Technigaz SA or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. INTERNET INJPADR 1
Performance |
| Timeline |
| Gaztransport Technigaz |
| INTERNET INJPADR 1 |
Gaztransport Technigaz and INTERNET INJPADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and INTERNET INJPADR
The main advantage of trading using opposite Gaztransport Technigaz and INTERNET INJPADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, INTERNET INJPADR 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 INTERNET INJPADR will offset losses from the drop in INTERNET INJPADR's long position.| Gaztransport Technigaz vs. Schlumberger Limited | Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. China Oilfield Services |
| INTERNET INJPADR vs. Direct Line Insurance | INTERNET INJPADR vs. EVS Broadcast Equipment | INTERNET INJPADR vs. Discover Financial Services | INTERNET INJPADR vs. Air Transport Services |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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