Correlation Between CHINA OIL and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both CHINA OIL 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 CHINA OIL and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA OIL AND and Gaztransport Technigaz SA, you can compare the effects of market volatilities on CHINA OIL 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 CHINA OIL with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA OIL and Gaztransport Technigaz.
Diversification Opportunities for CHINA OIL and Gaztransport Technigaz
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHINA and Gaztransport is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CHINA OIL AND and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and CHINA OIL 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 CHINA OIL AND 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 CHINA OIL i.e., CHINA OIL and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between CHINA OIL and Gaztransport Technigaz
Assuming the 90 days trading horizon CHINA OIL AND is expected to under-perform the Gaztransport Technigaz. In addition to that, CHINA OIL is 1.0 times more volatile than Gaztransport Technigaz SA. It trades about -0.04 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.04 per unit of volatility. If you would invest 9,970 in Gaztransport Technigaz SA on September 3, 2024 and sell it today you would earn a total of 3,790 from holding Gaztransport Technigaz SA or generate 38.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA OIL AND vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| CHINA OIL AND |
| Gaztransport Technigaz |
CHINA OIL and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA OIL and Gaztransport Technigaz
The main advantage of trading using opposite CHINA OIL and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA OIL 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.| CHINA OIL vs. INSURANCE AUST GRP | CHINA OIL vs. SCANSOURCE | CHINA OIL vs. Japan Post Insurance | CHINA OIL vs. QBE Insurance Group |
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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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