Correlation Between Gaztransport Technigaz and LIFEWAY FOODS
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS, you can compare the effects of market volatilities on Gaztransport Technigaz and LIFEWAY FOODS 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 LIFEWAY FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and LIFEWAY FOODS.
Diversification Opportunities for Gaztransport Technigaz and LIFEWAY FOODS
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gaztransport and LIFEWAY is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and LIFEWAY FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFEWAY FOODS 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 LIFEWAY FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFEWAY FOODS has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and LIFEWAY FOODS go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and LIFEWAY FOODS
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 7.04 times less return on investment than LIFEWAY FOODS. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 3.73 times less risky than LIFEWAY FOODS. It trades about 0.04 of its potential returns per unit of risk. LIFEWAY FOODS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 810.00 in LIFEWAY FOODS on September 12, 2024 and sell it today you would earn a total of 1,450 from holding LIFEWAY FOODS or generate 179.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. LIFEWAY FOODS
Performance |
| Timeline |
| Gaztransport Technigaz |
| LIFEWAY FOODS |
Gaztransport Technigaz and LIFEWAY FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and LIFEWAY FOODS
The main advantage of trading using opposite Gaztransport Technigaz and LIFEWAY FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, LIFEWAY FOODS 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 LIFEWAY FOODS will offset losses from the drop in LIFEWAY FOODS'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 |
| LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple Inc | LIFEWAY FOODS vs. Apple 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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