Correlation Between Piaggio C and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Piaggio C 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 Piaggio C and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piaggio C SpA and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Piaggio C 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 Piaggio C with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piaggio C and Gaztransport Technigaz.
Diversification Opportunities for Piaggio C and Gaztransport Technigaz
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Piaggio and Gaztransport is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Piaggio C SpA and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Piaggio C 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 Piaggio C SpA 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 Piaggio C i.e., Piaggio C and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Piaggio C and Gaztransport Technigaz
Assuming the 90 days horizon Piaggio C SpA is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, Piaggio C SpA is 2.14 times less risky than Gaztransport Technigaz. The stock trades about -0.02 of its potential returns per unit of risk. The Gaztransport Technigaz SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,530 in Gaztransport Technigaz SA on November 28, 2024 and sell it today you would earn a total of 720.00 from holding Gaztransport Technigaz SA or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Piaggio C SpA vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Piaggio C SpA |
| Gaztransport Technigaz |
Piaggio C and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piaggio C and Gaztransport Technigaz
The main advantage of trading using opposite Piaggio C and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piaggio C 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.| Piaggio C vs. Ribbon Communications | Piaggio C vs. Iridium Communications | Piaggio C vs. GEELY AUTOMOBILE | Piaggio C vs. TRADEGATE |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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