Correlation Between Gaztransport and MOL Hungarian

Can any of the company-specific risk be diversified away by investing in both Gaztransport and MOL Hungarian 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 MOL Hungarian 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 MOL Hungarian Oil, you can compare the effects of market volatilities on Gaztransport and MOL Hungarian 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 MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and MOL Hungarian.

Diversification Opportunities for Gaztransport and MOL Hungarian

0.0

Correlation Coefficient

Gaztransport  MOL Hungarian

Pay attention - limited upside

The 3 months correlation between Gaztransport and MOL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil 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 MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of Gaztransport i.e., Gaztransport and MOL Hungarian go up and down completely randomly.

Pair Corralation between Gaztransport and MOL Hungarian

If you would invest  12,964  in Gaztransport et Technigaz on December 4, 2024 and sell it today you would earn a total of  2,346  from holding Gaztransport et Technigaz or generate 18.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gaztransport et Technigaz  vs.  MOL Hungarian Oil

Gaztransport et Technigaz

Risk-Adjusted Performance

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 unveiled solid returns over the last few months and may actually be approaching a breakup point.

MOL Hungarian Oil

Risk-Adjusted Performance

Very Weak

Over the last 90 days MOL Hungarian Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MOL Hungarian is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gaztransport and MOL Hungarian

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

The idea behind Gaztransport et Technigaz and MOL Hungarian Oil 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.