Correlation Between Innovative Industrial and Gaztransport

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

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

Diversification Opportunities for Innovative Industrial and Gaztransport

-0.81

Correlation Coefficient

Innovative Industrial  Gaztransport

Pay attention - limited upside

The 3 months correlation between Innovative and Gaztransport is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Industrial Properti 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 Innovative Industrial 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 Innovative Industrial Properties 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 Innovative Industrial i.e., Innovative Industrial and Gaztransport go up and down completely randomly.

Pair Corralation between Innovative Industrial and Gaztransport

Assuming the 90 days trading horizon Innovative Industrial Properties is expected to generate 27.47 times more return on investment than Gaztransport. However, Innovative Industrial is 27.47 times more volatile than Gaztransport et Technigaz. It trades about 0.06 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.04 per unit of risk. If you would invest  9,259  in Innovative Industrial Properties on September 14, 2024 and sell it today you would earn a total of  1,177  from holding Innovative Industrial Properties or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Innovative Industrial Properti  vs.  Gaztransport et Technigaz

Innovative Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innovative Industrial Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 stable basic indicators, Gaztransport is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Innovative Industrial and Gaztransport

The main advantage of trading using opposite Innovative Industrial and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Industrial 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 Innovative Industrial Properties 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.