Correlation Between Sporttotal and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Sporttotal 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 Sporttotal and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Sporttotal 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 Sporttotal with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and Gaztransport Technigaz.
Diversification Opportunities for Sporttotal and Gaztransport Technigaz
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sporttotal and Gaztransport is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Sporttotal 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 Sporttotal AG 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 Sporttotal i.e., Sporttotal and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Sporttotal and Gaztransport Technigaz
Assuming the 90 days trading horizon Sporttotal is expected to generate 5.26 times less return on investment than Gaztransport Technigaz. In addition to that, Sporttotal is 2.39 times more volatile than Gaztransport Technigaz SA. It trades about 0.0 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.05 per unit of volatility. If you would invest 9,903 in Gaztransport Technigaz SA on August 24, 2024 and sell it today you would earn a total of 4,277 from holding Gaztransport Technigaz SA or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Sporttotal AG |
| Gaztransport Technigaz |
Sporttotal and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and Gaztransport Technigaz
The main advantage of trading using opposite Sporttotal and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal 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 Sporttotal AG and Gaztransport Technigaz SA 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. TITANIUM TRANSPORTGROUP | Gaztransport Technigaz vs. Haier Smart Home | Gaztransport Technigaz vs. Aedas Homes SA | Gaztransport Technigaz vs. Gold Road Resources |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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