Correlation Between Cornish Metals and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Gaztransport 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 Cornish Metals and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Gaztransport et Technigaz, you can compare the effects of market volatilities on Cornish Metals and Gaztransport 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 Cornish Metals with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Gaztransport.
Diversification Opportunities for Cornish Metals and Gaztransport
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cornish and Gaztransport is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and Cornish Metals 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 Cornish Metals are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Cornish Metals i.e., Cornish Metals and Gaztransport go up and down completely randomly.
Pair Corralation between Cornish Metals and Gaztransport
Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the Gaztransport. In addition to that, Cornish Metals is 3.84 times more volatile than Gaztransport et Technigaz. It trades about -0.11 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.14 per unit of volatility. If you would invest 13,340 in Gaztransport et Technigaz on September 2, 2024 and sell it today you would earn a total of 450.00 from holding Gaztransport et Technigaz or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Cornish Metals |
| Gaztransport et Technigaz |
Cornish Metals and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Gaztransport
The main advantage of trading using opposite Cornish Metals and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Gaztransport 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 will offset losses from the drop in Gaztransport's long position.| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Centamin PLC | Cornish Metals vs. Atalaya Mining |
| Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport vs. Triad Group PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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