Correlation Between Gaztransport Technigaz and Socit Des
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Socit Des 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 Gaztransport Technigaz and Socit Des into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SAS and Socit des Chemins, you can compare the effects of market volatilities on Gaztransport Technigaz and Socit Des 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 Gaztransport Technigaz with a short position of Socit Des. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Socit Des.
Diversification Opportunities for Gaztransport Technigaz and Socit Des
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Socit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and Socit des Chemins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit des Chemins and Gaztransport Technigaz 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 Gaztransport Technigaz SAS are associated (or correlated) with Socit Des. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit des Chemins has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Socit Des go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Socit Des
Assuming the 90 days trading horizon Gaztransport Technigaz is expected to generate 1.48 times less return on investment than Socit Des. But when comparing it to its historical volatility, Gaztransport Technigaz SAS is 1.46 times less risky than Socit Des. It trades about 0.07 of its potential returns per unit of risk. Socit des Chemins is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 635,000 in Socit des Chemins on September 4, 2024 and sell it today you would earn a total of 415,000 from holding Socit des Chemins or generate 65.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.96% |
| Values | Daily Returns |
Gaztransport Technigaz SAS vs. Socit des Chemins
Performance |
| Timeline |
| Gaztransport Technigaz |
| Socit des Chemins |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Gaztransport Technigaz and Socit Des Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Socit Des
The main advantage of trading using opposite Gaztransport Technigaz and Socit Des positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Socit Des 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 Socit Des will offset losses from the drop in Socit Des' long position.| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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