Correlation Between Veolia Environnement and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement 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 Veolia Environnement and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement SA and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Veolia Environnement 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 Veolia Environnement with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Gaztransport Technigaz.
Diversification Opportunities for Veolia Environnement and Gaztransport Technigaz
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Veolia and Gaztransport is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement SA and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement i.e., Veolia Environnement and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Veolia Environnement and Gaztransport Technigaz
Assuming the 90 days trading horizon Veolia Environnement is expected to generate 28.64 times less return on investment than Gaztransport Technigaz. But when comparing it to its historical volatility, Veolia Environnement SA is 1.29 times less risky than Gaztransport Technigaz. It trades about 0.0 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,966 in Gaztransport Technigaz SA on September 4, 2024 and sell it today you would earn a total of 1,794 from holding Gaztransport Technigaz SA or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement SA vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Veolia Environnement |
| Gaztransport Technigaz |
Veolia Environnement and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Gaztransport Technigaz
The main advantage of trading using opposite Veolia Environnement and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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.| Veolia Environnement vs. Gaztransport Technigaz SA | Veolia Environnement vs. Texas Roadhouse | Veolia Environnement vs. Gold Road Resources | Veolia Environnement vs. NXP Semiconductors NV |
| Gaztransport Technigaz vs. OAKTRSPECLENDNEW | Gaztransport Technigaz vs. DICKS Sporting Goods | Gaztransport Technigaz vs. BANKINTER ADR 2007 | Gaztransport Technigaz vs. Ameriprise Financial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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