Correlation Between Crown Holdings and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Crown Holdings 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 Crown Holdings and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Holdings and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Crown Holdings 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 Crown Holdings with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and Gaztransport Technigaz.
Diversification Opportunities for Crown Holdings and Gaztransport Technigaz
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crown and Gaztransport is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Crown Holdings 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 Crown Holdings 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 Crown Holdings i.e., Crown Holdings and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Crown Holdings and Gaztransport Technigaz
Assuming the 90 days horizon Crown Holdings is expected to generate 1.15 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, Crown Holdings is 1.06 times less risky than Gaztransport Technigaz. It trades about 0.1 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13,300 in Gaztransport Technigaz SA on September 3, 2024 and sell it today you would earn a total of 460.00 from holding Gaztransport Technigaz SA or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Holdings vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Crown Holdings |
| Gaztransport Technigaz |
Crown Holdings and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Holdings and Gaztransport Technigaz
The main advantage of trading using opposite Crown Holdings and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings 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.| Crown Holdings vs. Gaztransport Technigaz SA | Crown Holdings vs. NTG Nordic Transport | Crown Holdings vs. SEI INVESTMENTS | Crown Holdings vs. BROADSTNET LEADL 00025 |
| Gaztransport Technigaz vs. NISSAN CHEMICAL IND | Gaztransport Technigaz vs. Siamgas And Petrochemicals | Gaztransport Technigaz vs. STMicroelectronics NV | Gaztransport Technigaz vs. LPKF Laser Electronics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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