Correlation Between Sanofi SA and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Sanofi SA 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 Sanofi SA and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi SA and Gaztransport Technigaz SAS, you can compare the effects of market volatilities on Sanofi SA 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 Sanofi SA with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi SA and Gaztransport Technigaz.
Diversification Opportunities for Sanofi SA and Gaztransport Technigaz
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sanofi and Gaztransport is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi SA and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Sanofi 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 Sanofi SA 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 Sanofi SA i.e., Sanofi SA and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Sanofi SA and Gaztransport Technigaz
Assuming the 90 days trading horizon Sanofi SA is expected to under-perform the Gaztransport Technigaz. In addition to that, Sanofi SA is 1.07 times more volatile than Gaztransport Technigaz SAS. It trades about -0.3 of its total potential returns per unit of risk. Gaztransport Technigaz SAS is currently generating about 0.07 per unit of volatility. If you would invest 13,730 in Gaztransport Technigaz SAS on August 30, 2024 and sell it today you would earn a total of 220.00 from holding Gaztransport Technigaz SAS or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanofi SA vs. Gaztransport Technigaz SAS
Performance |
| Timeline |
| Sanofi SA |
| Gaztransport Technigaz |
Sanofi SA and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi SA and Gaztransport Technigaz
The main advantage of trading using opposite Sanofi SA and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi SA 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.The idea behind Sanofi SA and Gaztransport Technigaz SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gaztransport Technigaz vs. Rubis SCA | Gaztransport Technigaz vs. Teleperformance SE | Gaztransport Technigaz vs. Sartorius Stedim Biotech | Gaztransport Technigaz vs. Nexity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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