Correlation Between Gaztransport Technigaz and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and Technip Energies 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 Technip Energies 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 Technip Energies BV, you can compare the effects of market volatilities on Gaztransport Technigaz and Technip Energies 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 Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Technip Energies.
Diversification Opportunities for Gaztransport Technigaz and Technip Energies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Technip is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies 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 Technip Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technip Energies has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Technip Energies go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and Technip Energies
Assuming the 90 days trading horizon Gaztransport Technigaz is expected to generate 2.19 times less return on investment than Technip Energies. But when comparing it to its historical volatility, Gaztransport Technigaz SAS is 2.59 times less risky than Technip Energies. It trades about 0.23 of its potential returns per unit of risk. Technip Energies BV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,024 in Technip Energies BV on August 26, 2024 and sell it today you would earn a total of 264.00 from holding Technip Energies BV or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SAS vs. Technip Energies BV
Performance |
| Timeline |
| Gaztransport Technigaz |
| Technip Energies |
Gaztransport Technigaz and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and Technip Energies
The main advantage of trading using opposite Gaztransport Technigaz and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, Technip Energies 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 Technip Energies will offset losses from the drop in Technip Energies' long position.| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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