Correlation Between Warehouses and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Warehouses 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 Warehouses and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warehouses De Pauw and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Warehouses 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 Warehouses with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warehouses and Gaztransport Technigaz.
Diversification Opportunities for Warehouses and Gaztransport Technigaz
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Warehouses and Gaztransport is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Warehouses De Pauw and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Warehouses 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 Warehouses De Pauw 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 Warehouses i.e., Warehouses and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Warehouses and Gaztransport Technigaz
Assuming the 90 days trading horizon Warehouses De Pauw is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, Warehouses De Pauw is 1.16 times less risky than Gaztransport Technigaz. The stock trades about -0.1 of its potential returns per unit of risk. The Gaztransport Technigaz SA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 13,347 in Gaztransport Technigaz SA on September 13, 2024 and sell it today you would lose (397.00) from holding Gaztransport Technigaz SA or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Warehouses De Pauw vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Warehouses De Pauw |
| Gaztransport Technigaz |
Warehouses and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warehouses and Gaztransport Technigaz
The main advantage of trading using opposite Warehouses and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warehouses 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.| Warehouses vs. Extra Space Storage | Warehouses vs. REXFORD INDREALTY DL 01 | Warehouses vs. CubeSmart | Warehouses vs. First Industrial Realty |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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