Correlation Between KUBOTA P and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both KUBOTA P 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 KUBOTA P and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KUBOTA P ADR20 and Gaztransport Technigaz SA, you can compare the effects of market volatilities on KUBOTA P 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 KUBOTA P with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of KUBOTA P and Gaztransport Technigaz.
Diversification Opportunities for KUBOTA P and Gaztransport Technigaz
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KUBOTA and Gaztransport is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KUBOTA P ADR20 and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and KUBOTA P 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 KUBOTA P ADR20 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 KUBOTA P i.e., KUBOTA P and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between KUBOTA P and Gaztransport Technigaz
Assuming the 90 days trading horizon KUBOTA P ADR20 is expected to generate 0.84 times more return on investment than Gaztransport Technigaz. However, KUBOTA P ADR20 is 1.18 times less risky than Gaztransport Technigaz. It trades about -0.08 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about -0.08 per unit of risk. If you would invest 5,850 in KUBOTA P ADR20 on September 13, 2024 and sell it today you would lose (150.00) from holding KUBOTA P ADR20 or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KUBOTA P ADR20 vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| KUBOTA P ADR20 |
| Gaztransport Technigaz |
KUBOTA P and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KUBOTA P and Gaztransport Technigaz
The main advantage of trading using opposite KUBOTA P and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KUBOTA P 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.| KUBOTA P vs. Gaztransport Technigaz SA | KUBOTA P vs. Ming Le Sports | KUBOTA P vs. AOYAMA TRADING | KUBOTA P vs. NTG Nordic Transport |
| Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. NOV Inc | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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