Correlation Between Gaztransport Technigaz and Ming Le
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on Gaztransport Technigaz and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Ming Le.
Diversification Opportunities for Gaztransport Technigaz and Ming Le
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Ming is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Ming Le go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Ming Le
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.8 times more return on investment than Ming Le. However, Gaztransport Technigaz SA is 1.25 times less risky than Ming Le. It trades about 0.07 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.01 per unit of risk. If you would invest 9,242 in Gaztransport Technigaz SA on August 31, 2024 and sell it today you would earn a total of 4,418 from holding Gaztransport Technigaz SA or generate 47.8% 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. Ming Le Sports
Performance |
| Timeline |
| Gaztransport Technigaz |
| Ming Le Sports |
Gaztransport Technigaz and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Ming Le
The main advantage of trading using opposite Gaztransport Technigaz and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Gaztransport Technigaz vs. Schlumberger Limited | Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. Superior Plus Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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