Correlation Between Gamma Communications and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Gaztransport et Technigaz, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Gaztransport.
Diversification Opportunities for Gamma Communications and Gaztransport
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamma and Gaztransport is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC 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 Gamma Communications 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 Gamma Communications PLC 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 Gamma Communications i.e., Gamma Communications and Gaztransport go up and down completely randomly.
Pair Corralation between Gamma Communications and Gaztransport
Assuming the 90 days trading horizon Gamma Communications PLC is expected to generate 0.87 times more return on investment than Gaztransport. However, Gamma Communications PLC is 1.15 times less risky than Gaztransport. It trades about 0.07 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.05 per unit of risk. If you would invest 101,397 in Gamma Communications PLC on August 28, 2024 and sell it today you would earn a total of 57,203 from holding Gamma Communications PLC or generate 56.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications PLC vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Gamma Communications PLC |
| Gaztransport et Technigaz |
Gamma Communications and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Gaztransport
The main advantage of trading using opposite Gamma Communications and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. SupplyMe Capital PLC | Gamma Communications vs. Premier African Minerals | Gamma Communications vs. SANTANDER UK 8 | Gamma Communications vs. Vodafone Group PLC |
| Gaztransport vs. BW Offshore | Gaztransport vs. Tyson Foods Cl | Gaztransport vs. Capital Metals PLC | Gaztransport vs. Zoom Video Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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