Correlation Between CeoTronics and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both CeoTronics 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 CeoTronics and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and Gaztransport Technigaz SA, you can compare the effects of market volatilities on CeoTronics 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 CeoTronics with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Gaztransport Technigaz.
Diversification Opportunities for CeoTronics and Gaztransport Technigaz
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CeoTronics and Gaztransport is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between CeoTronics and Gaztransport Technigaz
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.59 times more return on investment than Gaztransport Technigaz. However, CeoTronics is 1.59 times more volatile than Gaztransport Technigaz SA. It trades about 0.08 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.04 per unit of risk. If you would invest 345.00 in CeoTronics AG on September 26, 2024 and sell it today you would earn a total of 245.00 from holding CeoTronics AG or generate 71.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| CeoTronics AG |
| Gaztransport Technigaz |
CeoTronics and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Gaztransport Technigaz
The main advantage of trading using opposite CeoTronics and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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.| CeoTronics vs. Cisco Systems | CeoTronics vs. Cisco Systems | CeoTronics vs. Motorola Solutions | CeoTronics vs. Nokia |
| Gaztransport Technigaz vs. CeoTronics AG | Gaztransport Technigaz vs. CEOTRONICS | Gaztransport Technigaz vs. AGF Management Limited | Gaztransport Technigaz vs. THRACE PLASTICS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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