Correlation Between Kering SA and Transportadora
Can any of the company-specific risk be diversified away by investing in both Kering SA and Transportadora 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 Kering SA and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and Transportadora de Gas, you can compare the effects of market volatilities on Kering SA and Transportadora 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 Kering SA with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Transportadora.
Diversification Opportunities for Kering SA and Transportadora
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kering and Transportadora is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and Kering SA 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 Kering SA are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Kering SA i.e., Kering SA and Transportadora go up and down completely randomly.
Pair Corralation between Kering SA and Transportadora
Assuming the 90 days horizon Kering SA is expected to generate 2.89 times less return on investment than Transportadora. But when comparing it to its historical volatility, Kering SA is 1.8 times less risky than Transportadora. It trades about 0.16 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Transportadora de Gas on September 12, 2024 and sell it today you would earn a total of 600.00 from holding Transportadora de Gas or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kering SA vs. Transportadora de Gas
Performance |
| Timeline |
| Kering SA |
| Transportadora de Gas |
Kering SA and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and Transportadora
The main advantage of trading using opposite Kering SA and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Kering SA vs. Deckers Outdoor | Kering SA vs. Superior Plus Corp | Kering SA vs. NMI Holdings | Kering SA vs. SIVERS SEMICONDUCTORS AB |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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