Correlation Between Covivio Hotels and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Covivio Hotels 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 Covivio Hotels and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio Hotels and Gaztransport Technigaz SAS, you can compare the effects of market volatilities on Covivio Hotels 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 Covivio Hotels with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio Hotels and Gaztransport Technigaz.
Diversification Opportunities for Covivio Hotels and Gaztransport Technigaz
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Covivio and Gaztransport is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Covivio Hotels and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Covivio Hotels 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 Covivio Hotels 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 Covivio Hotels i.e., Covivio Hotels and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Covivio Hotels and Gaztransport Technigaz
Assuming the 90 days trading horizon Covivio Hotels is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, Covivio Hotels is 3.04 times less risky than Gaztransport Technigaz. The stock trades about -0.21 of its potential returns per unit of risk. The Gaztransport Technigaz SAS is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 13,300 in Gaztransport Technigaz SAS on August 26, 2024 and sell it today you would earn a total of 810.00 from holding Gaztransport Technigaz SAS or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio Hotels vs. Gaztransport Technigaz SAS
Performance |
| Timeline |
| Covivio Hotels |
| Gaztransport Technigaz |
Covivio Hotels and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio Hotels and Gaztransport Technigaz
The main advantage of trading using opposite Covivio Hotels and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio Hotels 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.| Covivio Hotels vs. Fonciere Lyonnaise | Covivio Hotels vs. Fonciere Inea | Covivio Hotels vs. Immobiliere Dassault SA | Covivio Hotels vs. Frey SA |
| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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