Correlation Between Broadridge Financial and Gaztransport

Can any of the company-specific risk be diversified away by investing in both Broadridge Financial and Gaztransport 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 Broadridge Financial and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broadridge Financial Solutions and Gaztransport et Technigaz, you can compare the effects of market volatilities on Broadridge Financial and Gaztransport 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 Broadridge Financial with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadridge Financial and Gaztransport.

Diversification Opportunities for Broadridge Financial and Gaztransport

0.77

Correlation Coefficient

Broadridge Financial  Gaztransport

Poor diversification

The 3 months correlation between Broadridge and Gaztransport is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and Broadridge Financial 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 Broadridge Financial Solutions are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Broadridge Financial i.e., Broadridge Financial and Gaztransport go up and down completely randomly.

Pair Corralation between Broadridge Financial and Gaztransport

Assuming the 90 days trading horizon Broadridge Financial Solutions is expected to generate 0.68 times more return on investment than Gaztransport. However, Broadridge Financial Solutions is 1.47 times less risky than Gaztransport. It trades about 0.18 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.08 per unit of risk. If you would invest  21,012  in Broadridge Financial Solutions on September 4, 2024 and sell it today you would earn a total of  2,384  from holding Broadridge Financial Solutions or generate 11.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Broadridge Financial Solutions  vs.  Gaztransport et Technigaz

Broadridge Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gaztransport et Technigaz

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gaztransport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Broadridge Financial and Gaztransport

The main advantage of trading using opposite Broadridge Financial and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadridge Financial position performs unexpectedly, Gaztransport 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 will offset losses from the drop in Gaztransport's long position.

The idea behind Broadridge Financial Solutions and Gaztransport et Technigaz 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.