Correlation Between Air Transport and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Air Transport and Gaztransport Technigaz 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 Air Transport and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Air Transport and Gaztransport Technigaz 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 Air Transport with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Gaztransport Technigaz.
Diversification Opportunities for Air Transport and Gaztransport Technigaz
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Gaztransport is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Air Transport 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 Air Transport Services are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Air Transport i.e., Air Transport and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Air Transport and Gaztransport Technigaz
Assuming the 90 days horizon Air Transport is expected to generate 40.0 times less return on investment than Gaztransport Technigaz. In addition to that, Air Transport is 1.69 times more volatile than Gaztransport Technigaz SA. It trades about 0.0 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.05 per unit of volatility. If you would invest 9,650 in Gaztransport Technigaz SA on August 28, 2024 and sell it today you would earn a total of 4,490 from holding Gaztransport Technigaz SA or generate 46.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Air Transport Services |
| Gaztransport Technigaz |
Air Transport and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Gaztransport Technigaz
The main advantage of trading using opposite Air Transport and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AerCap Holdings NV | Air Transport vs. Grupo Aeroportuario del |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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