Correlation Between Disney and TGS ASA
Can any of the company-specific risk be diversified away by investing in both Disney and TGS ASA 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 Disney and TGS ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and TGS ASA, you can compare the effects of market volatilities on Disney and TGS ASA 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 Disney with a short position of TGS ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and TGS ASA.
Diversification Opportunities for Disney and TGS ASA
Excellent diversification
The 3 months correlation between Disney and TGS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and TGS ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS ASA and Disney 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 Walt Disney are associated (or correlated) with TGS ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS ASA has no effect on the direction of Disney i.e., Disney and TGS ASA go up and down completely randomly.
Pair Corralation between Disney and TGS ASA
Considering the 90-day investment horizon Walt Disney is expected to generate 0.81 times more return on investment than TGS ASA. However, Walt Disney is 1.23 times less risky than TGS ASA. It trades about 0.31 of its potential returns per unit of risk. TGS ASA is currently generating about -0.06 per unit of risk. If you would invest 8,913 in Walt Disney on September 2, 2024 and sell it today you would earn a total of 2,834 from holding Walt Disney or generate 31.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. TGS ASA
Performance |
| Timeline |
| Walt Disney |
| TGS ASA |
Disney and TGS ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and TGS ASA
The main advantage of trading using opposite Disney and TGS ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, TGS ASA 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 TGS ASA will offset losses from the drop in TGS ASA's long position.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications Corp |
| TGS ASA vs. Expro Group Holdings | TGS ASA vs. ChampionX | TGS ASA vs. Ranger Energy Services | TGS ASA vs. Cactus Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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