Correlation Between Gaztransport Technigaz and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Gaztransport Technigaz and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and TIMES CHINA.
Diversification Opportunities for Gaztransport Technigaz and TIMES CHINA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and TIMES is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and TIMES CHINA go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and TIMES CHINA
Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 0.46 times more return on investment than TIMES CHINA. However, Gaztransport Technigaz SA is 2.18 times less risky than TIMES CHINA. It trades about 0.35 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.18 per unit of risk. If you would invest 12,780 in Gaztransport Technigaz SA on October 23, 2024 and sell it today you would earn a total of 1,600 from holding Gaztransport Technigaz SA or generate 12.52% 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. TIMES CHINA HLDGS
Performance |
| Timeline |
| Gaztransport Technigaz |
| TIMES CHINA HLDGS |
Gaztransport Technigaz and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and TIMES CHINA
The main advantage of trading using opposite Gaztransport Technigaz and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.The idea behind Gaztransport Technigaz SA and TIMES CHINA HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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