Correlation Between SCOTT TECHNOLOGY and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Gaztransport Technigaz SA, you can compare the effects of market volatilities on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Gaztransport Technigaz.
Diversification Opportunities for SCOTT TECHNOLOGY and Gaztransport Technigaz
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SCOTT and Gaztransport is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Gaztransport Technigaz
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to under-perform the Gaztransport Technigaz. In addition to that, SCOTT TECHNOLOGY is 1.12 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 0.36 per unit of volatility. If you would invest 12,780 in Gaztransport Technigaz SA on October 23, 2024 and sell it today you would earn a total of 1,640 from holding Gaztransport Technigaz SA or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Gaztransport Technigaz |
SCOTT TECHNOLOGY and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Gaztransport Technigaz
The main advantage of trading using opposite SCOTT TECHNOLOGY and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY 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.| SCOTT TECHNOLOGY vs. X FAB Silicon Foundries | SCOTT TECHNOLOGY vs. Materialise NV | SCOTT TECHNOLOGY vs. Firan Technology Group | SCOTT TECHNOLOGY vs. Compagnie Plastic Omnium |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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