Correlation Between Gaztransport Technigaz and Hotelim Socit
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Hotelim Socit 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 Hotelim Socit 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 Hotelim Socit Anonyme, you can compare the effects of market volatilities on Gaztransport Technigaz and Hotelim Socit 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 Hotelim Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Hotelim Socit.
Diversification Opportunities for Gaztransport Technigaz and Hotelim Socit
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaztransport and Hotelim is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and Hotelim Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotelim Socit Anonyme 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 Hotelim Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotelim Socit Anonyme has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Hotelim Socit go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Hotelim Socit
Assuming the 90 days trading horizon Gaztransport Technigaz is expected to generate 3.85 times less return on investment than Hotelim Socit. But when comparing it to its historical volatility, Gaztransport Technigaz SAS is 4.4 times less risky than Hotelim Socit. It trades about 0.05 of its potential returns per unit of risk. Hotelim Socit Anonyme is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,880 in Hotelim Socit Anonyme on August 30, 2024 and sell it today you would earn a total of 1,060 from holding Hotelim Socit Anonyme or generate 36.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.45% |
| Values | Daily Returns |
Gaztransport Technigaz SAS vs. Hotelim Socit Anonyme
Performance |
| Timeline |
| Gaztransport Technigaz |
| Hotelim Socit Anonyme |
Gaztransport Technigaz and Hotelim Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Hotelim Socit
The main advantage of trading using opposite Gaztransport Technigaz and Hotelim Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Hotelim Socit 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 Hotelim Socit will offset losses from the drop in Hotelim Socit's long position.| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
| Hotelim Socit vs. Accor S A | Hotelim Socit vs. Ferm Casino Mun | Hotelim Socit vs. Les Hotels Bav | Hotelim Socit vs. Socit Htelire et |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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