Correlation Between Gaztransport and AP Moeller

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Can any of the company-specific risk be diversified away by investing in both Gaztransport and AP Moeller 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 Gaztransport and AP Moeller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and AP Moeller , you can compare the effects of market volatilities on Gaztransport and AP Moeller 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 Gaztransport with a short position of AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and AP Moeller.

Diversification Opportunities for Gaztransport and AP Moeller

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Gaztransport and 0O77 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and AP Moeller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller and Gaztransport 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 Gaztransport et Technigaz are associated (or correlated) with AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller has no effect on the direction of Gaztransport i.e., Gaztransport and AP Moeller go up and down completely randomly.

Pair Corralation between Gaztransport and AP Moeller

Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.74 times more return on investment than AP Moeller. However, Gaztransport et Technigaz is 1.35 times less risky than AP Moeller. It trades about 0.2 of its potential returns per unit of risk. AP Moeller is currently generating about -0.09 per unit of risk. If you would invest  12,993  in Gaztransport et Technigaz on October 9, 2024 and sell it today you would earn a total of  822.00  from holding Gaztransport et Technigaz or generate 6.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gaztransport et Technigaz  vs.  AP Moeller

 Performance 
       Timeline  
Gaztransport et Technigaz 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 8 (%) 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.
AP Moeller 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AP Moeller are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AP Moeller unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gaztransport and AP Moeller Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gaztransport and AP Moeller

The main advantage of trading using opposite Gaztransport and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, AP Moeller 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 AP Moeller will offset losses from the drop in AP Moeller's long position.
The idea behind Gaztransport et Technigaz and AP Moeller 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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