Correlation Between Tyson Foods and Gaztransport

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

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

Diversification Opportunities for Tyson Foods and Gaztransport

0.62

Correlation Coefficient

Tyson Foods  Gaztransport

Poor diversification

The 3 months correlation between Tyson and Gaztransport is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl 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 Tyson Foods 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 Tyson Foods Cl 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 Tyson Foods i.e., Tyson Foods and Gaztransport go up and down completely randomly.

Pair Corralation between Tyson Foods and Gaztransport

Assuming the 90 days trading horizon Tyson Foods is expected to generate 2.12 times less return on investment than Gaztransport. But when comparing it to its historical volatility, Tyson Foods Cl is 1.09 times less risky than Gaztransport. It trades about 0.03 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12,327  in Gaztransport et Technigaz on October 7, 2024 and sell it today you would earn a total of  1,518  from holding Gaztransport et Technigaz or generate 12.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

Tyson Foods Cl  vs.  Gaztransport et Technigaz

Tyson Foods Cl

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tyson Foods Cl are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Tyson Foods is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Gaztransport et Technigaz

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 9 (%) 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 February 2025.

Pair Trading with Tyson Foods and Gaztransport

The main advantage of trading using opposite Tyson Foods and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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 Tyson Foods Cl 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.