Correlation Between Arch Capital and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Arch Capital 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 Arch Capital and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arch Capital Group and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Arch Capital 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 Arch Capital with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arch Capital and Gaztransport Technigaz.
Diversification Opportunities for Arch Capital and Gaztransport Technigaz
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arch and Gaztransport is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arch Capital Group and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Arch Capital 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 Arch Capital Group 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 Arch Capital i.e., Arch Capital and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Arch Capital and Gaztransport Technigaz
Assuming the 90 days horizon Arch Capital Group is expected to generate 1.44 times more return on investment than Gaztransport Technigaz. However, Arch Capital is 1.44 times more volatile than Gaztransport Technigaz SA. It trades about 0.23 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.09 per unit of risk. If you would invest 8,486 in Arch Capital Group on September 2, 2024 and sell it today you would earn a total of 991.00 from holding Arch Capital Group or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arch Capital Group vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Arch Capital Group |
| Gaztransport Technigaz |
Arch Capital and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arch Capital and Gaztransport Technigaz
The main advantage of trading using opposite Arch Capital and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arch Capital 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.| Arch Capital vs. Gaztransport Technigaz SA | Arch Capital vs. Richardson Electronics | Arch Capital vs. QUEEN S ROAD | Arch Capital vs. Nishi Nippon Railroad Co |
| Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. Origin Agritech |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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