Correlation Between London Security and Gaztransport
Can any of the company-specific risk be diversified away by investing in both London Security and Gaztransport 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 London Security and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between London Security Plc and Gaztransport et Technigaz, you can compare the effects of market volatilities on London Security and Gaztransport 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 London Security with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of London Security and Gaztransport.
Diversification Opportunities for London Security and Gaztransport
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between London and Gaztransport is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding London Security Plc and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and London Security 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 London Security Plc are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of London Security i.e., London Security and Gaztransport go up and down completely randomly.
Pair Corralation between London Security and Gaztransport
Assuming the 90 days trading horizon London Security Plc is expected to under-perform the Gaztransport. In addition to that, London Security is 1.86 times more volatile than Gaztransport et Technigaz. It trades about -0.21 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.14 per unit of volatility. If you would invest 13,330 in Gaztransport et Technigaz on September 1, 2024 and sell it today you would earn a total of 460.00 from holding Gaztransport et Technigaz or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
London Security Plc vs. Gaztransport et Technigaz
Performance |
| Timeline |
| London Security Plc |
| Gaztransport et Technigaz |
London Security and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with London Security and Gaztransport
The main advantage of trading using opposite London Security and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London Security position performs unexpectedly, Gaztransport 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 will offset losses from the drop in Gaztransport's long position.| London Security vs. Samsung Electronics Co | London Security vs. Samsung Electronics Co | London Security vs. Hyundai Motor | London Security vs. Toyota Motor Corp |
| Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport vs. Triad Group PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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