Correlation Between Natural Health and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Gaztransport Technigaz.
Diversification Opportunities for Natural Health and Gaztransport Technigaz
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Gaztransport is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Natural Health and Gaztransport Technigaz
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the Gaztransport Technigaz. In addition to that, Natural Health is 1.6 times more volatile than Gaztransport Technigaz SA. It trades about -0.01 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about -0.01 per unit of volatility. If you would invest 13,300 in Gaztransport Technigaz SA on September 5, 2024 and sell it today you would lose (100.00) from holding Gaztransport Technigaz SA or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Natural Health Trends |
| Gaztransport Technigaz |
Natural Health and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Gaztransport Technigaz
The main advantage of trading using opposite Natural Health and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. ANGLER GAMING PLC | Natural Health vs. Hochschild Mining plc | Natural Health vs. HOCHSCHILD MINING | Natural Health vs. OURGAME INTHOLDL 00005 |
| Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. Origin Agritech | 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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