Correlation Between Fair Oaks and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Fair Oaks 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 Fair Oaks and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Oaks Income and Gaztransport et Technigaz, you can compare the effects of market volatilities on Fair Oaks 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 Fair Oaks with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Gaztransport.
Diversification Opportunities for Fair Oaks and Gaztransport
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fair and Gaztransport is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income 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 Fair Oaks 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 Fair Oaks Income 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 Fair Oaks i.e., Fair Oaks and Gaztransport go up and down completely randomly.
Pair Corralation between Fair Oaks and Gaztransport
Assuming the 90 days trading horizon Fair Oaks Income is expected to generate 0.71 times more return on investment than Gaztransport. However, Fair Oaks Income is 1.41 times less risky than Gaztransport. It trades about 0.21 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about -0.14 per unit of risk. If you would invest 55.00 in Fair Oaks Income on September 20, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fair Oaks Income vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Fair Oaks Income |
| Gaztransport et Technigaz |
Fair Oaks and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Oaks and Gaztransport
The main advantage of trading using opposite Fair Oaks and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Oaks 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.| Fair Oaks vs. Infrastrutture Wireless Italiane | Fair Oaks vs. Take Two Interactive Software | Fair Oaks vs. Vitec Software Group | Fair Oaks vs. Extra Space Storage |
| Gaztransport vs. Cars Inc | Gaztransport vs. Air Products Chemicals | Gaztransport vs. Systemair AB | Gaztransport vs. Fair Oaks Income |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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