Correlation Between Gaztransport and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on Gaztransport and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Chocoladefabriken.
Diversification Opportunities for Gaztransport and Chocoladefabriken
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gaztransport and Chocoladefabriken is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Gaztransport i.e., Gaztransport and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Gaztransport and Chocoladefabriken
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 1.52 times more return on investment than Chocoladefabriken. However, Gaztransport is 1.52 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.04 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about -0.04 per unit of risk. If you would invest 11,948 in Gaztransport et Technigaz on September 26, 2024 and sell it today you would earn a total of 882.00 from holding Gaztransport et Technigaz or generate 7.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.22% |
Values | Daily Returns |
Gaztransport et Technigaz vs. Chocoladefabriken Lindt Spruen
Performance |
Timeline |
Gaztransport et Technigaz |
Chocoladefabriken Lindt |
Gaztransport and Chocoladefabriken Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gaztransport and Chocoladefabriken
The main advantage of trading using opposite Gaztransport and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.Gaztransport vs. Uniper SE | Gaztransport vs. Mulberry Group PLC | Gaztransport vs. London Security Plc | Gaztransport vs. Triad Group PLC |
Chocoladefabriken vs. Uniper SE | Chocoladefabriken vs. Mulberry Group PLC | Chocoladefabriken vs. London Security Plc | Chocoladefabriken vs. Triad Group PLC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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